THE BANGKO SENTRAL ng Pilipinas' (BSP) short-term securities were quoted at a slightly higher average yield on Friday as bids declined week on week.
Tenders for the 28-day BSP bills amounted to P43.39 billion, higher than the P40 billion placed on the auction block. However, this was below the P62.179 billion in bids fetched in the previous week for the same offer volume.
3% was mopped up through the overnight reverse repurchase facility, 21.
This was equivalent to a bid-to-cover ratio 1.0848 times, lower than the 1.5545 ratio seen during the previous auction.
"The BSP partially awarded P39.5 billion of the tenders, with accepted yields widening to a range of 4.7200% to 4.7600%," the central bank said in a statement.
The accepted rates for the one-month bills were slightly wider than the 4.72%-4.75% band a week earlier. This caused the weighted average accepted rate to edge up by 0.59 basis point to 4.7394% from 4.7335% previously.
The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity from 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.
It has now limited its BSP securities offerings to a single tenor to rationalize its liquidity operations and focus on tenors that would boost monetary policy transmission.
Based on its June 2026 Monetary Policy Report, the central bank's open market operations have siphoned off P1.3 trillion in liquidity from the financial system.
Of this, 19.2% was absorbed through BSP securities, while 52.3% was mopped up through the overnight reverse repurchase facility, 21.5% via the overnight deposit facility, and 6.9% from the term deposit facility. — Katherine K. Chan.