BSP bills fetch lower rate on oversubscription

THE CENTRAL BANK’S short-term securities fetched a lower average rate on Friday as the offer drew strong demand, even as the auction volume was raised.

The 27-day Bangko Sentral ng Pilipinas (BSP) bills fetched P112.904 billion in tenders, exceeding the P100 billion placed on the auction block. However, this was below the P138.162 billion in tenders for a P90-billion offer of 28-day papers the prior week. The tenor offered was adjusted due to a holiday.

With this, the bid-to-cover ratio went down to 1.129 times from the 1.5351 ratio recorded previously.

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

Accepted rates were from 4.5% to 4.64%, wider and lower than the 4.58% to 4.67% range seen a week prior. This caused the weighted average accepted yield of the one-month papers to go down by 4.03 basis points to 4.5979% from 4.6382% a week earlier.

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.

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.

In August last year, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term papers to manage liquidity as they want to boost activity in the money market.

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. — K.K. Chan