BSP securities fetch lower rates

THE BANGKO SENTRAL ng Pilipinas’ (BSP) short-term securities continued to fetch lower rates on Friday as demand for the papers stayed strong.

Total bids for the 28-day BSP bills reached P80.146 billion, higher than the P70 billion auctioned off and the P77.838 billion in tenders for the same offer volume in the previous auction.

As a result, the bid-to-cover ratio climbed to 1.1449 times from the 1.112 ratio recorded the previous week.

With this, the central bank made a full award of its offering.

Accepted yields were from 4.35% to 4.529%, lower and narrower than the 4.38% to 4.58% band logged a week earlier. This caused the average rate of the one-month securities to fall by 4.43 basis points to 4.4496% from 4.4939% in the prior week.

“The 28-day BSP bill rate declined further,” the central bank said in a statement on Friday.

“The BSP maintained the offer volume at P70 billion, while tenders reached P80.1 billion, resulting in a bid-to-cover ratio of 1.14x,” it added.

The BSP has not auctioned off the 56-day bills 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 help guide short-term market yields towards its policy rate.

BSP Deputy Governor Zeno Ronald R. Abenoja earlier said that the central bank has reduced its issuance of short-term papers to enhance monetary policy transmission and encourage banks to better manage their liquidity. 

Data from the BSP showed that around 50% of its market operations are done through its short-term securities.

As of mid-November 2025, the central bank’s monetary operations have siphoned off P1.5 trillion in liquidity from the market. Of this, 42.4% was absorbed through BSP securities, 34.6% from overnight reverse repurchase agreements, 17.6% via the overnight deposit facility, and 5.4% through the term deposit facility.

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

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