Central bank securities’ rate dips on strong demand
THE BANGKO SENTRAL ng Pilipinas’ (BSP) short-term securities fetched a lower average accepted rate on Friday as the offer attracted strong investor demand.
Bids on the 28-day BSP bills reached P111.165 billion, nearly double the P60 billion placed on the auction block. This was also above the P90.884 billion in tenders for a P70-billion offer a week earlier.
This was equivalent to a bid-to-cover ratio of 1.8528 times, higher than the 1.2983 ratio in the previous auction.
With this, the central bank made a full award of its offering.
Accepted rates narrowed to the 4.6% to 4.678% range from 4.6% to 4.715% seen in the prior week. This caused the average accepted rate of the one-month papers to slip by 0.8 basis point week on week to 4.6571% from 4.6651% previously.
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
