YIELDS on the central bank’s one-month securities dropped on Friday even as the offer was undersubscribed. The 28-day Bangko Sentral ng Pilipinas (BSP) bills fetchedYIELDS on the central bank’s one-month securities dropped on Friday even as the offer was undersubscribed. The 28-day Bangko Sentral ng Pilipinas (BSP) bills fetched

BSP bills’ rates go down despite lower demand

2025/12/22 00:02
2 min read
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YIELDS on the central bank’s one-month securities dropped on Friday even as the offer was undersubscribed.

The 28-day Bangko Sentral ng Pilipinas (BSP) bills fetched bids amounting to P80.828 billion, below the P90 billion placed on the auction block and the P132.25 billion in tenders for the same offer a week prior. This was equivalent to a bid-to-cover ratio of 0.8981 times, down from the 1.4694 ratio seen the prior week.

The central bank accepted all the tenders submitted for the offering.

Accepted rates ranged from 4.5% to 5%, wider than the 4.7125% to 4.89% margin seen during the previous auction. With this, the weighted average accepted rate of the 28-day bill fell by 7.97 basis points to 4.7501% from 4.8298%.

The BSP has not auctioned off the 56-day bills for over a month or since Nov. 3.

The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide short-term market rates towards its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission.

In August, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term papers to manage liquidity as they want to boost activity in the money market.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities. — Katherine K. Chan

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