BSP bill yields rise as demand weakens

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities rose on Friday after demand fell short of the central bank’s offer.

Total bids for the 28-day BSP bills reached P45.15 billion, below the P70 billion on offer and the P80.15 billion in tenders recorded for the same volume last week, according to data posted on the central bank’s website.

The lower demand translated to a bid-to-cover ratio of 0.65 times. The BSP awarded only P45.15 billion in securities.

Accepted yields ranged from 4.35% to 4.56%, wider than the 4.35% to 4.529% in the previous auction. The average yield on the one-month bills rose by 4.99 basis points week on week to 4.4995%.

The BSP has not offered the 56-day bill since November 2025.

The central bank uses BSP securities alongside its term deposit facility to absorb excess liquidity from the financial system and guide short-term market rates closer to its policy rate.

BSP Deputy Governor Zeno Ronald R. Abenoja earlier said the central bank had scaled back issuance of short-term papers to improve monetary policy transmission and encourage banks to manage their liquidity more actively.

Data from the BSP showed that about half of its market operations are conducted through short-term securities.

As of mid-November 2025, the central bank had absorbed about P1.5 trillion in liquidity from the financial system, with 42.4% accounted for by BSP securities.

The BSP also said its bills help improve price discovery for debt instruments whilst supporting the transmission of monetary policy.

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