Also demonstrating there is still liquidity in the Philippine financial system, the Bangko Sentral ng Pilipinas was able to raise P60 billion from sales of its own securities.
While it was able to raise P60 billion, the BSP said it got bids worth P109.20 billion, which means the security sale was oversubcribed by more than two times. This also demonstrates that domestic money supply, despite the coronavirus disease 2019 (Covid-19) affecting numerous businesses and industries, is still ample.
The 28-day BSP bills have a 1.8487-percent interest rate and matures on November 10.
“The sustained strong market interest for BSP bills continues to reflect ample liquidity in the financial system,” Bangko Sentral Deputy Governor Francisco Dakila Jr. said in a statement.
“Moving forward, the BSP will continue to refine and recalibrate the overall strategy of its current monetary operations, guided by its assessment of recent market developments and liquidity conditions,” he added.
The BSP will use the proceeds of its securities sales to help implement its monetary policy. Also, the latest security offer will help BSP manage liquidity in the country’s financial system and guide market interest rates, which will help businesses and industries affected by Covid-19 to recover in the next few months.
BSP’s latest data showed the country’s money supply, or domestic liquidity, rose by 14.2 percent year-on-year to P13.6 trillion in August.