TDF yields go down as benign inflation supports easing bets

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits continued to edge down on Wednesday amid strong demand and on expectations of another rate cut as inflation remains benign.

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Bids for the central bank’s term deposit facility (TDF) amounted to P140.077 billion, well above the P100 billion auctioned off and the P125.644 billion in bids for the same offer volume last week. The BSP fully awarded both tenors.

Broken down, the seven-day papers fetched P56.8 billion in bids, higher than the P50 billion placed on the auction block and the P53.122 billion seen for the same volume offered a week ago.

Banks asked for rates ranging from 5.03% to 5.08%, narrower than the 5% to 5.09% logged the previous week. This caused the weighted average accepted yield to slip by 0.44 basis point (bp) to 5.059% from 5.0634% previously.

Meanwhile, tenders for the 14-day papers hit P83.277 billion, well above the P50-billion offer and the P72.522 billion in demand for the same volume auctioned off last week.

Accepted yields were from 5.06% to 5.09%, a narrower band compared with the 4.98% to 5.1125% seen a week earlier. With this, the average rate dropped by 1.19 bps to 5.0799% from 5.0918%.