Demand for the Bangko Sentral ng Pilipinas’ (BSP) seven-day term deposit facility (TDF) strengthened week-on-week, reflecting continued excess liquidity in the financial system.

In the 10 December auction, total tenders for the seven-day TDF rose to P157.0 billion from P135.6 billion in the previous week. The BSP kept the offering volume unchanged at P80.0 billion, pushing the bid-to-cover ratio higher to 1.96 times.

The BSP fully awarded the offering, with accepted yields ranging from 4.5200 percent to 4.7240 percent. The weighted average interest rate (WAIR) declined by 4.82 basis points to settle at 4.6798 percent, indicating easing short-term rate pressures.

Parking excess funds with BSP

Market participants said the results suggest banks continue to park excess funds with the central bank, even as rates at the short end show signs of softening.

The TDF forms part of the BSP’s liquidity management toolkit, allowing it to absorb excess funds from the financial system and better guide short-term market rates in line with monetary policy signals.