YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Friday, with both tenors still oversubscribed.

The central bank’s securities fetched bids amounting to P256.109 billion on Friday, above the P180-billion offer and the P221.45 billion in tenders for the P120 billion auctioned off a week ago.

Broken down, tenders for the 28-day BSP bills reached P117.382 billion, higher than the P100-billion offer and the P101.477 billion in bids for the P50 billion placed on the auction block in the prior week.

Banks asked for yields ranging from 5.81% to 5.904%, down from the 5.84% to 5.925% band seen previously. This caused the average rate of the one-month securities to inch up by 0.41 basis point (bp) to 5.8659% from 5.8618%.

Meanwhile, bids for the 56-day bills amounted to P138.727 billion, well above the P80-billion offering and the P119.973 billion in tenders for a P70-billion offer the previous week.

Accepted rates for the two-month tenor were from 5.82% to 5.909%, also lower than the 5.875% to 5.99% margin seen in the prior auction. With this, the average rate of the securities fell by 5.16 bps to 5.8923% from 5.9439%.

The central bank increased the volume of the BSP bills (BSPB) offered on Friday compared to the prior auction, BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

It made a full award of both tenors amid strong demand, Mr. Dakila said.

“Total tenders received rose to P256.109 billion (from P221.450 billion) and resulted in bid-to-cover ratios of 1.17 times for the 28-day BSPB and 1.73 times for the 56-day BSPB,” he added.

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 market rates.

The BSP bills were calibrated to not overlap with the Treasury bill and term deposit tenors also being offered weekly.

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

Short-term instruments offer more stability and predictability, the BSP earlier said. These are also considered “high-quality liquid assets” and grant more flexibility for banks versus the term deposits, which are not tradable.

The central bank has amended regulations on the participation of trust entities through investment management accounts to access BSP-issued securities, according to a circular posted on its website last week.

In the case of trust entities, only unit investment trust funds and investment management accounts may be invested in central bank securities, the BSP said. — Luisa Maria Jacinta C. Jocson