The strong investors demand for the P100-billion securities offered by the Bangko Sentral ng Pilipinas resulted in oversubscription despite the recent policy rate hikes by monetary authorities.
The BSP said in a statement it maintained the volume offering for the issuance of the 28-day bills at P100 billion. Demand from eligible market participants remained stable with total tenders amounting to P141.45 billion or about 1.41 times the volume offering.
It said the weighted average interest rate for the bills continued to increase from last week’s rate, rising by 3.3527 basis points to 4.0596 percent.
The yields accepted remained broadly unchanged at a range of 3.8800 to 4.1000 percent.
“The results of the BSP bill auction showed stable liquidity conditions even as short-term interest rates adjust following the recent BSP policy rate hike as well as expectations of continued tightening from key central banks,” BSP Deputy Governor Francisco Dakila Jr. said.
He said BSP’s monetary operations would remain guided by its assessment of the latest liquidity conditions and market developments.
The BSP earlier said domestic liquidity, or the money supply circulating in the financial system, grew by 7.0 percent year-on-year to about P15.4 trillion as of July from the 7.2-percent growth in June. On a month-on-month seasonally-adjusted basis, domestic liquidity increased by 0.3 percent.
Domestic claims rose 11.5 percent year-on-year in July from 9.9 percent in the previous month on the improvement in bank lending to the private sector. Claims on the private sector grew by 8.9 percent in July from 8.8 percent in June with the sustained expansion in bank lending to non-financial private corporations and households.
Net claims on the central government rose 22.2 percent in July from 15.3 percent in June on sustained borrowing by the national government.
Republic Act 11211, which amended R.A. 7653 (The New Central Bank Act), restored the BSP’s authority to issue its own debt securities as part of its instruments for regular monetary operations.
The issuance of BSP securities complements the other short-term monetary policy tools used by the BSP to manage liquidity in the financial system such as the term deposit facility, overnight reverse repurchase facility, overnight deposit facility and overnight lending facility.
