Term deposit yields down across the board

MANILA, Philippines — Yields of term deposits eased across all tenors as banks continued to park their excess funds in the liquidity absorption facility.

The seven-day tenor fetched 4.3486 percent at the term deposit auction facility (TDF) yesterday, 6.55 basis point lower than last week’s 4.4141 percent, while the yield of the 14-day term deposits slipped by 3.57 basis points to 4.3995 percent from 4.4352 percent.

Likewise, the 28-day term deposit rate slipped by 0.43 basis points to 4.4907 percent from 4.4950 percent.

“Average TDF rates declined across tenors relative to the previous week as all tenors were oversubscribed, reflecting increased liquidity in the system,” BSP Deputy Governor Francisco Dakila Jr. said.

Banks continued to park their excess funds in the liquidity absorption facility as total tenders amounted to P93.39 billion or almost double the higher issue size of P50 billion.

Bids for the seven-day term deposits reached P23.7 billion, more than double the P10-billion issue size, while bids for the 14-day tenor amounted to P35.45 billion, higher than the P20 billion volume.

Likewise, bids for the 28-day term deposits amounted to P35.24 billion versus the issue size of P20 billion.

Dakila said the offer volume increased to P50 billion this week from the previous week’s offer of P40-billion in anticipation of higher excess liquidity to be siphoned from the financial system as a result of funds released from the deposits of the national government with the BSP.