Connect with us

Hi, what are you looking for?

Economy

Term deposit yields end mixed

YIELDS ON THE central bank’s term deposits ended mixed on Wednesday, with the two-week papers’ rate seeing an increase, amid the government’s ongoing sale of retail Treasury bonds (RTBs).

Demand for the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) reached P700.754 billion on Wednesday, beating the P600-billion program. It was also bigger than the P695.227 billion in tenders seen last week.

Broken down, the BSP made a full P200-billion award of the one-week debt papers it offered on Wednesday as tenders hit P283.031 billion, inching down from the P283.972 billion in bids seen at the Feb. 25 auction.

Banks asked for yields ranging from 1.6% to 1.675%, a higher band compared with the 1.59% to 1.656% range seen previously. This caused the seven-day papers to fetch an average rate of 1.6332%, inching down by 0.1 basis point (bp) from the 1.6342% logged in last week’s auction.

The central bank also raised P400 billion as planned via the 14-day securities from total bids worth P417.723 billion. Wednesday’s total tenders were slightly higher than the P411.255 billion recorded a week ago.

Accepted rates for the tenor settled between 1.6475% and 2%, a slimmer band than the previous range of 1.6-2%. The average rate of the two-week term deposits rose by 7.49 bps to 1.7804% on Wednesday from 1.7055% last week.

The BSP did not offer 28-day term deposits for the 20th straight week to give way to its weekly offering of bills with the same tenor.

The TDF and BSP securities are tools used by the central bank to mop up excess liquidity in the financial system and to better guide market interest rates.

BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement that the uptick in the rate of the two-week term deposits may have been caused by a shift in preference for investors searching for higher returns.

“Moving forward, the BSP’s monetary operations will continue to be guided by its assessment of liquidity conditions and market developments,” Mr. Dakila said.

TDF rates ended mixed as excess liquidity in the markets have been siphoned off by the ongoing sale of three-year RTBs set to end on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a mobile phone message.

The Bureau of the Treasury is currently offering three-year RTBs that carry a coupon rate of 2.375% until March 4. It sold an initial P221.218 billion in retail papers in its rate-setting auction on Feb. 9.

“Expectations of higher inflation at new two-year highs partly led to higher TDF auction yields in recent weeks,” Mr. Ricafort added.

“Despite mixed results, this still shows liquidity remaining strong and probably just a slight shift in appetite for the two-week debt paper. Although we have to see if this is sustained in the coming weeks,” Security Bank Corp. Chief Economist Robert Dan J. Roces said via Viber on Wednesday.

Headline inflation likely breached the central bank’s target for a second straight month in February, as food and fuel prices remain elevated, according to economists.

A BusinessWorld poll of 16 analysts last week yielded a median estimate of 4.8%, near the upper end of the 4.3% to 5.1% estimate range given by the BSP but beyond the 2-4% annual target.

If realized, the median estimate will be quicker than the 4.2% print in January and the 2.6% a year earlier. It would also be the quickest since 5.1% print in December 2018.

The Philippine Statistics Authority will report February inflation data on March 5.

The Monetary Board at its rate-setting meeting on Feb. 11 raised its average inflation forecast this year to 4% from 3.2% previously. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

The goal for most businesses is to grow, so the concept of bad growth may seem counterintuitive to a lot of business owners. However,...

Investing

Employees of all companies will be able to request flexible working arrangements when they start new jobs under proposals to be published by ministers....

Investing

Our perspectives on remote working have changed dramatically over the course of the pandemic. No doubt many employers in 2019 would have assumed that...

Economy

The Bangko Sentral ng Pilipinas (BSP) lowered the country’s balance of payments (BoP) surplus projection for this year, reflecting the lower current account surplus and the risks...

Economy

The Securities and Exchange Commission (SEC) is encouraging more companies to tap the capital markets, in hopes that there would be over 800 companies listed at...

Economy

Outsourcing firms operating in economic zones are allowed to implement remote work arrangements until March 2022 as the pandemic continues, the Finance department said...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!