Rates of BSP securities slip

YIELDS on the central bank’s short-term securities fetched a lower average rate on Friday as the offer was met with strong demand.

The one-month Bangko Sentral ng Pilipinas (BSP) bills attracted P129.759 billion in bids, exceeding the P90 billion placed on the auction block and P111.393 billion in tenders for the same offer volume the week prior.

This was equivalent to a bid-to-cover ratio of 1.4418 times, higher than the 1.2377 ratio seen previously.

This led the BSP to make a full P90-billion award of its offer.

Accepted rates ranged from 4.65% to 4.85%, narrower than the 4.665% to 4.94% seen during the previous auction. This brought the average rate of the 28-day papers to 4.8099%, down by 1.09 basis points week on week from 4.8208%.

The BSP has not auctioned off the 56-day bills for nearly three months 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 yields towards its policy rate.

As of mid-November 2025, the BSP’s monetary operations have siphoned off P1.5 trillion in liquidity.

Of the total, 42.4% were absorbed through BSP securities, 34.6% from the overnight reverse repurchase agreement, 17.6% through overnight deposit facilities and 5.4% via term deposit facilities.

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

In August 2025, 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.

The central bank started auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.

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