BSP bills auction attracts P186.38-B bids (Sabong News)
Author
Lee C. Chipongian
Date
APRIL 08 2022
The central bank’s auction of 28-day securities facility, offered at P130 billion on Friday, April 8, received P186.38 billion bids on strong demand ahead of the Holy Week break.
The tenders were however lower compared to P210.75 billion received on April 1 against offer of P120 billion last week.
The Bangko Sentral ng Pilipinas (BSP) securities fetched a lower average rate of 1.9312 percent versus 1.9374 percent in the previous auction.
The bid coverage ratio, meantime, dropped to 1.4331 compared to 1.7563 on April 1.
The central bank first offered the BSP securities facility in September 2020 with only a P20-billion offer. It was BSP’s first time to issue securities since the “JOBO” bills in the 1980s.
BSP securities are part of monetary operations under the interest rate corridor (IRC) framework for liquidity management in the financial system. As part of IRC, it helps implement monetary policy but it will not change the policy stance.
The BSP restored its authority to sell its own bonds and bills on Feb. 14, 2019 when the amendments to the BSP Charter was signed into a new law or Republic Act No. 11211.
Issuing securities was an available monetary tool under the original charter of the central bank but it made it difficult to use this debt instrument. The old central bank law used the Central Bank Certificates of Indebtedness or the “JOBO” Bills — named after central bank governor Jose B. Fernandez Jr. — to mop up excess liquidity in the 1980s.
