THE CENTRAL BANK fully awarded its offer of 28-day bills on Friday, with yields inching lower on investors’ strong appetite for safe assets due to concerns on the Delta variant of the coronavirus disease 2019 (COVID-19).
The Bangko Sentral ng Pilipinas (BSP) awarded P100 billion as planned in one-month bills on Friday. Demand reached P162.51 billion, lower than the P186.61 billion in tenders seen in the previous auction.
Lenders asked for yields ranging from 1.745% to 1.7705%, down from the 1.77% to 1.789% band logged at last week’s auction. This caused the average rate of the one-month paper to decrease by 2.42 basis points to 1.7602% from 1.7844% previously.
The BSP bills and the term deposit facility are used by the central bank to gather excess liquidity in the financial system and guide market rates.
Yields on the BSP securities declined due to safe-haven demand amid tighter restrictions imposed by the government amid a rise in Delta variant infections in the country, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
The high bids for the BSP securities also reflect the excess liquidity in the financial system, Mr. Ricafort added.
Presidential Spokesperson Herminio L. Roque, Jr. on Friday said Metro Manila will be under general community quarantine “with heightened restrictions” until July 31.
There were 47 recorded cases of the Delta variant in the Philippines as of Thursday, where eight are active while three have died. — L.W.T. Noble