The Philippine central bank fully awarded the short-term debt it offered on Friday as rates dipped after last-minute changes to the country’s lockdown status.
The Bangko Sentral ng Pilipinas (BSP) raised P110 billion from 28-day bills, as total bids reached P137.82 billion.
The auction was 1.25 times oversubscribed, but the demand fell from P148.05 billion at the auction last week. Yields sought for the securities ranged from 1.7% to 1.742%, wider than 1.713%-1.728% last week.
The bills fetched an average rate of 1.718%, compared with 1.719% a week ago.
“The auction results continue to show that market conditions remain normal, supported by ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in an e-mailed statement.
“The BSP’s monetary operations will remain guided by its latest assessment of liquidity conditions and market developments,” he added.
Rates of short-term debt eased after the government extended the strict lockdown in Metro Manila for another week, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.
Earlier this week, presidential spokesman Herminio L. Roque, Jr. said Metro Manila would be under a modified enhanced community quarantine until Sept. 8, reversing a plan for targeted lockdowns.
This sparked outrage from small businesses, especially restaurant owners who had prepared to open their stores and stock up on inventories.
The country is facing its worst coronavirus outbreak since the pandemic started last year, caused by a more contagious Delta variant.
The Health department reported 17,964 new coronavirus infections on Friday, pushing the total active cases to 175,470.
A stronger peso against the dollar had also helped pull down the yields on the short-term debt, easing inflationary pressures via cheaper import prices, Mr. Ricafort said. — Beatrice M. Laforga