March 23, 2019
The Bangko Sentral ng Pilipinas (BSP) said its weekly term deposit facility (TDF) would be cut to P30 billion from P50 billion on March 27 ahead of the holidays and the tax season in April.
For the 14-day facility, the weekly offering will be trimmed to P10 billion from P20 billion.
The seven-day facility will be kept at P20 billion.
Meanwhile, there was no volume set for the 28-day tenor.
“Its two reasons: the Holy Week and the tax season in April,” BSP Deputy Governor Diwa Guinigundo said in an interview late on Thursday.
Guinigundo is referring to the public holidays on April 18 to 20 for the observance of the Holy Week and the April 15 deadline for taxpayers’ filing of their annual income tax returns to the Bureau of Internal Revenue (BIT).
“Remember, if the clients of the banks have alternative uses of their money instead of just depositing it to the banks, and the banks in turn will deposit it into the BSP, then we will have to adjust the volume of offering,” he added.
The TDF is one of the liquidity-mopping tools introduced by the BSP following the adoption of the interest rate corridor in June 2016. It aims to improve the central bank’s influence on market rates and ultimately enhance monetary policy.
During the last auction, the BSP fully awarded the P50-billion TDF, with total bids for the seven- , 14- and 28-day facilities reaching over P65 billion.
Bids in the seven-day tenor totaled P27.254 billion; the 14-day tenor attracted P22.198 billion in bids; and the 28-day facility garnered P16.078 billion.
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