BSP fully awards short-term bills
By Luz Wendy T. Noble, Reporter听
The central bank fully awarded听P100 billion worth of听28-day bills on Friday,听as听rates听fell听due to concerns听about听rising听coronavirus听infections and after the central bank听again lent to the National Government.听
The auction was听oversubscribed 1.94 times as bids reached P194.7 billion, but听demand听fell from a week earlier. Rates for the听debt reached听1.7% to 1.749%, narrower than last week.听
This brought the average rate of the short-term bills to 1.7298%, 3.68 basis points听lower than at the Jan. 7 auction.听
The听Bangko Sentral ng Pilipinas (BSP)听uses its short-term securities and term deposit facility to听mop up听excess liquidity in the financial system and guide market rates.听
The average yield on the BSP bills declined as concerns remained due to increasing infections,听Michael L. Ricafort, chief听economist听at听Rizal Commercial Banking Corp.,听said in a Viber message.听
COVID-19 cases in the Philippines rose by听34,021 coronavirus infections on Thursday 鈥 a fresh record 鈥 while active cases reached 237,387, also the highest since the pandemic started.听
Mr. Ricafort said investors听had听also factored in the听National听Government鈥檚 cash position, which听increased after听it got a听P300-billion听loan from the BSP.听
Central bank听Governor Benjamin E. Diokno said the zero-interest loan was approved on Dec. 16. It will be payable in three months听and may be extended for another quarter.听
The direct advance is smaller than previous ones听because听the central bank is gradually unwinding support measures rolled out during the pandemic.听
