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BSP's 28-day rate rises

21 May 2022, 12:02 GMT+10

MANILA - The average rate of the Bangko Sentral ng Pilipinas' (BSP) 28-day bills increased on Friday, the day the 25 basis points rise in the central bank's policy rate took effect.

Data released by the central bank showed that the rate of the debt securities rose to 2.3183 from 2.1747 percent during the auction on May 13.

The BSP hiked the offer volume to PHP140 billion from the previous week's PHP130 billion.

The auction committee made a full award from total tenders of PHP172.945 billion. The bid coverage ratio stood at 1.2353.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said the range of yields in this week's securities auction "shifted higher and widened to a range of 2.0875 to 2.4950 percent."

"The results of the 28-day bill auction reflect in part the 25-bp hike in the BSP policy rate, which became effective today. Nevertheless, liquidity in the financial system remained ample," Dakila said.

He added that the central bank's "monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments."

On Thursday, the BSP's policy-making Monetary Board hiked the central bank's key policy rate after noting the continued recovery of the domestic economy as of the first quarter of the year and the expected rise in the domestic inflation rate, which is due in part to the impact of rising oil and commodity prices in the international market.

After the 200 basis points cut in the BSP's key rates in 2020, which is part of the BSP's pandemic-related measures, the overnight reverse repurchase (RRP) rate, which was at its record-low 2 percent before the rate hike, is now at 2.25 percent. (PNA)

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