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Philippines: Term deposit yields rise across the board
MANILA, Philippines — Term deposit yields rose across the board as cash-rich banks continued to park their excess funds in the liquidity absorption facility of the Bangko Sentral ng Pilipinas (BSP).
BSP Deputy Governor Francisco Dakila Jr. said tenders at yesterday’s term deposit auction facility reached P502.1 billion, higher than the increased volume offering of P310 billion.
“All tenors were oversubscribed. The auction results continue to show that the financial system liquidity remains ample,” Dakila said.
Bids for the seven-day term deposits reached P171.97 billion versus the increased issue size of P130 billion, while tenders for the 14-day tenor amounted to P225.55 billion also higher than the P130 billion offering.
Likewise, bids for the 28-day term deposits amounted to P104.56 billion or more than double the volume of P50 billion.
The yield of the seven-day tenor increased by 2.95 basis points to 1.8129 percent from last week’s 1.7834 percent, while that of the 14-day term deposits went up by 1.07 basis points to 1.8424 percent from 1.8317.
Furthermore, the 28-day term deposits fetched 1.8613 percent, 1.32 basis points higher than last week’s 1.8481 percent.
“Going forward, the BSP will continue to be guided by its assessment of market developments and liquidity conditions in the calibration of its monetary operations,” Dakila said.
The Monetary Board took a prudent pause and left interest rates unchanged for the first time this year on Aug. 20 to allow previous aggressive monetary actions work its way through the economy.
Authorities want to evaluate the impact of previous monetary actions undertaken to soften the blow of the COVID-19 pandemic.
The BSP has so far slashed interest rates by 175 basis points, bringing the benchmark rate at an all-time low of 2.25 percent. It also lowered the reserve requirement ratio for big banks by 200 basis points and for mid-sized and small banks by 100 basis points.
Measures implemented by the BSP to soften the blow of the novel coronavirus disease 2019 or COVID-19 pandemic have unleashed P1.3 trillion into the financial system.
Source: https://www.philstar.com/business/2020/09/03/2039642/term-deposit-yields-rise-across-board