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Term Deposits Yield Continues to Rise

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MANILA, Philippines – Seven- and 28-day term deposits continue to yield more in the midst of Bangko Sentral ng Pilipinas’ (BSP) offer of a higher volume.

BSP presented a higher volume of term deposits to recuperate with strengthened demand from trust entities and financial firms.

From 2.5109 percent last week, seven-day term deposits generated 2.5189 percent amid the average between 2.5 to 2.525 percent. On the other hand, 28-day term deposits climbed up from 2.6337 percent to 2.6920 percent while the average yield is 2.5 percent to 2.75 percent.

For a bid coverage ratio of 2.96, seven-day term deposits’ tenders increased to P29.66 billion, whereas the offers for 28-day term deposits are valued at P232.8 billion for 1.94 bid coverage ratio.

BSP provided a full grant of P10 billion for the seven-day term deposits, whereas 28-day term deposits received P120 billion.

The adjustment in the term deposit facility volume was driven by good interest. Last November 4, BSP set a P130 billion volume, which is the fifth TDF raise since its June 8 launching. Original volume of TDF is P30 billion in line with the interest rate corridor (IRC) system shift.

Last October 5, the volume was increased to P110 billion, which is a shift from P90 billion in August 31. On the other hand, August 3 had a shift to P70 billion. Lastly, in July, there was a volume increase of P50 billion.

The weekly auction results exhibit that the system still has fluidity, stated by BSP Governor Amando Tetangco Jr.

Tetangco added that latest situation in the West, wherein the US Federal Reserve would only alter the interest rates after the elections,  is similar to 28-day term deposits healthy uptake.

As of now, the governor stated that policy settings modification would not take place since no reason will prompt it. He added that inflation dynamics’ domestic influencers should be considered, such as natural calamities. Response will be provided when necessary depending on the situation.

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