BSP securities’ average yield climbs

THE BANGKO Sentral ng Pilipinas’ (BSP) short-term securities fetched a higher average rate for the third straight week despite sustained investor demand.

Bids for the 28-day BSP bills amounted to P81.892 billion on Friday, above the P70 billion placed on the auction block and the P76.3 billion in tenders for the same offer volume last Monday.

“The 28‑day BSP bill rate increased further,” the central bank said in a statement. “With the offer volume unchanged at P70 billion, total tenders reached P81.9 billion, resulting in a bid-to-cover ratio of 1.17 times.”

The bid-to-cover ratio climbed from the 1.09 times seen in the previous auction.

With this, the BSP awarded its entire P70-billion offer.

Accepted yields were at 4.495% to 4.728%, a higher and narrower range versus the 4.4% to 4.69% margin in the previous auction. As a result, the average accepted rate for the one-month papers went up by 12.76 basis points to 4.6483% from 4.5207%.

The BSP has not auctioned off the 56-day bills 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 help guide short-term market yields towards its policy rate.

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

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

In its February 2026 Monetary Policy Report, the central bank said it has limited its BSP securities offerings to a single tenor to rationalize its liquidity operations and focus on tenors that would boost monetary policy transmission.

As of mid-February, the central bank’s monetary operations have siphoned off P1.2 trillion in liquidity from the market. Of this, 28.5% was absorbed through BSP securities, while 44.4% were done through overnight reverse repurchase facility, 18.2% via the overnight deposit facility, and 9% from the term deposit facility. — Katherine K. Chan