P110B generated from BSP titles

The Bangko Sentral ng Pilipinas (BSP) brought in 110 billion pesos from its weekly sale of securities.

On Friday, the central bank’s one-month BSP bill was oversubscribed by 1.23 times the proposed volume of 110 billion pesos, with a total of bids totaling 135.10 billion pesos.

“The results of the BSP invoice auction remain in line with the BSP’s view that market conditions remain normal and the liquidity of the financial system continues to be plentiful,” said BSP Deputy Governor Francisco Dakila Jr., in a statement.

He added that with good demand from market participants, the weighted average interest rate edged up 0.074 basis points to 1.7746 percent. Meanwhile, the accepted yields declined slightly, but remained in the narrow range of 1.753 to 1.790 percent.

Accepted yields declined slightly, but remained in the narrow range of 1.753 to 1.790 percent.

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

BSP securities are monetary instruments issued under the interest rate corridor for its implementation of monetary policy and liquidity management operations.

The securities would also add to the pool of risk-free assets in the financial system, alongside those issued by the government that can be traded for liquidity purposes.

Through regular auctions of BSP securities, the issuance of these securities can contribute to better discovery of the price of debt securities and support the transmission of monetary policy in the process.

Its power to issue negotiable debt certificates, even in normal times, has been reinstated by the Law of the Republic (RA) 11211. Signed in February 2019, RA 11211 amended RA 7653, or the “new law on the 1993 central bank ”.

Prior to the amendment, central bank debt offers were only allowed in the event of extraordinary price movements.

Bangko Sentral Governor Benjamin Diokno said earlier that monetary authorities continued to seek to improve the securities and improve its market-friendly characteristics.

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