BSP raises $110B from short-term bills

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The Philippine central bank raised P110 billion from its auction of 28-day bills on Friday, with rates falling as the lockdown in Metro Manila was again relaxed.

The Bangko Sentral ng Pilipinas (BSP) fully awarded the one-month bills that were oversubscribed, with tenders reaching P148.69 billion. Demand was also higher than the P130.25 billion in bids it got a week earlier.

The average rate of the debt paper fell by 0.98 basis point to 1.7591% from a week earlier. Accepted rates were 1.75% to 1.7799%.

The central bank uses short-term securities and its term deposit facility to mop up excess liquidity in the financial system and guide market rates.

The government’s pandemic task force on Thursday said Metro Manila would be under Alert Level 2 starting Nov. 5, allowing more businesses including the entertainment industry to boost their operating capacities.

The rates also tracked the easing trend in US yields as the Federal Reserve signaled that it would keep interest rates near zero, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

The benchmark 10-year US Treasury yields fell to 1.509%, the lowest since mid-October, Reuters reported on Thursday.

The Fed on Wednesday said it would start tapering asset purchases by the end of the month. But Fed Chairman Jerome Powell said they would keep interest rates to support the still weak US job market. — Luz Wendy T. Noble