Rates of BSP bills decline

2026/02/02 00:01

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) one-month securities went down on Friday as the offer remained oversubscribed, with a slightly lower volume placed on the auction block.

The 28-day BSP bills attracted P123.48 billion in bids, exceeding the P80 billion auctioned off but below the P164.166 billion in tenders for a P90-billion offer the prior week. This was equivalent to a bid-to-cover ratio of 1.5435 times, lower than the 1.8241 ratio logged in the previous auction.

The central bank accepted all the submitted bids.

Accepted rates ranged from 4.65% to 4.714%, lower than the 4.724% to 4.78% seen a week earlier. With this, the average rate of the one-month securities fell by 5.15 basis points to 4.6981% from 4.7496%.

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 better guide short-term market yields towards its policy rate.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities.

As of mid-November 2025, the BSP’s monetary operations have siphoned off P1.5 trillion in liquidity from the financial system.

Of the total, 42.4% was absorbed through BSP securities, 34.6% from overnight reverse repurchase agreements, 17.6% through the overnight deposit facility, and 5.4% via term deposits.

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 started 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

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