The Market Monitor Minding the Nation's Business
The Bangko Sentral ng Pilipinas (BSP) announced on Friday that it has reduced the total offering of its BSP bills (BSPB) to P160 billion, down from P190 billion in the previous week. This adjustment was made in response to evolving market conditions and liquidity management needs.
In a statement, BSP Deputy Governor Francisco Dakila Jr. explained that the allocation for the 28-day tenor was reduced to P60 billion from P70 billion, while the volume for the 56-day tenor was cut to PHP100 billion from P120 billion. These reductions reflect the central bank’s ongoing efforts to fine-tune its monetary operations.
Despite the lower volume offering, both tenors saw a decline in their weighted average interest rates. The rate for the 28-day BSP bills dropped by 3.31 basis points, settling at 6.3136 percent, while the 56-day tenor experienced a decrease of 3.70 basis points to 6.3255 percent.
Dakila noted that the range of accepted yields widened for both tenors, with the 28-day bills ranging from 6.3136 percent to 6.4380 percent, and the 56-day bills ranging from 6.1480 percent to 6.4180 percent.
Total tenders for the BSP bills amounted to P129.785 billion, a significant drop from the P225.470 billion recorded in the previous auction. This reflects a more cautious market sentiment amid fluctuating interest rates and external economic factors.
The BSP’s decision to adjust its offering size aligns with its broader goal of managing liquidity in the financial system while ensuring that its monetary policy remains effective in maintaining price stability.