BSP securities fetch lower rates as offer attracts strong demand

THE BANGKO SENTRAL ng Pilipinas’ (BSP) one-month securities fetched a lower average rate on Friday as the offer was met with strong demand.

The 28-day BSP bills attracted bids amounting to P111.393 billion, exceeding the P90 billion on offer and the P68.714 billion in tenders for the P100 billion placed on the auction block the prior week.

“The BSP reduced the offer volume from P100 billion in the previous week to P90 billion, while total tenders reached P111.4 billion, resulting in a bid-to-cover ratio of 1.24x,” the central bank said in a statement on Friday.

This bid-to-cover ratio was nearly double the 0.6871 times seen a week prior.

The central bank made a full P90-billion award of the one-month papers.

Accepted yields were from 4.665% to 4.94%, narrower than the 4.65% to 5.05% band seen in the previous auction. With this, the weighted average accepted rate of the 28-day bill fell by 3.14 basis points to 4.8208% from 4.8516%.

The BSP has not auctioned off the 56-day bills for more than two months or since Nov. 3.

The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide short-term market yields towards its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission.

In August 2025, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term papers to manage liquidity as they want to boost activity in the money market.

The central bank started auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities. — Katherine K. Chan