THE CENTRAL BANK made a full award of the short-term securities it offered on Friday as rates declined as the government kept Metro Manila under strict quarantine measures.
The Bangko Sentral ng Pilipinas raised P100 billion via the 28-day bills it auctioned off on Friday out of bids worth P153.98 billion, nearly twice as much as the offer volume but smaller compared to the P183.25 billion in bids seen in the previous week’s auction.
Banks asked for rates ranging from 1.715% to 1.738% during the auction, a lower band compared to the 1.74%-1.7525% band seen last week. This caused the debt papers to fetch an average rate of 1.731%, 1.8 basis points lower than the 1.749% logged a week ago.
“The results of the auction reflect the continued strong interest for the BSP bill amid sustained ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the yields on 28-day bills dipped as the market reacted to the extension of strict lockdown measures in the National Capital Region (NCR), even as the quarantine classification was eased slightly. He said the prolonged lockdown meant economic growth could slow further.
Palace spokesman Herminio L. Roque, Jr. on Friday said NCR will be under modified enhanced community quarantine (MECQ) for the rest of the month starting Saturday, following the two-week hard lockdown in the past two weeks.
Despite being a different quarantine status, restrictions for areas under MECQ are only slightly looser as certain activities such as dine-in at restaurants, both indoor and outdoor, and personal care services are still not allowed.
Mr. Ricafort added that the sharp drop in global oil prices also helped pull down local bond yields as this could temper inflation pressures.
Brent crude declined by 2.6%, or $1.78 to hit $66.45 per barrel on Thursday, amid the rising concerns over virus resurgence across economies, Reuters reported. — B.M. Laforga with Reuters