BSP invoices continue to be oversubscribed

28-day securities of Bangko Sentral ng Pilipinas (BSP) were oversubscribed by 1.59 times during their auction on Friday, the latest for 2020.

“The BSP offered and granted a total of 80 billion pesos in 28-day bills in the last BSP securities auction of the year amid increased demand for liquidity during the holidays in the coming weeks,” said the deputy governor of the BSP, Francisco G. Dakila Jr.

He also noted that due to strong demand, the weighted average rate continued to fall 0.838 basis points (bp) to 1.6837 percent on Friday. The range of accepted returns this week was lower and still narrow, between 1,670 and 1,690 percent.

BSP bills are risk-free assets and can be traded. The BSP received total tenders of P127.35 billion, 1.59 times the offered volume of P80 billion. However, the bids were lower compared to P141.25 billion last week.

Dakila said there is a strong sustained interest in the market that reflects the excess liquidity in the financial system.

BSP first offered BSP lyrics on September 18. The securities line is considered one of the BSP’s most effective liquidity management tools in bringing short-term market rates closer to the policy rate.