TO further support the Filipino people during the COVID-19 pandemic, the Monetary Board authorized the Bangko Sentral ng Pilipinas (BSP) to purchase government securities from the Bureau of Treasury (BTr) under a repurchase agreement in the amount of P300 billion with a maximum repayment period of six months.
The fund generated from the said agreement shall be used to support the National Government’s (NG) programs to counter the impact of Coronavirus Disease 2019 (COVID-19)
According to national treasurer Rosalia de Leon, the arrangement is “the most cost-effective way to provide an extra lifeline to the national government to support the programs to fight this pandemic.”
Benjamin Diokno, BSP Governor, said the amount is intended to provide support for those most affected by the enhanced community quarantine, especially in Luzon, for the next 60 to 90 days.
“We continue to support the government’s initiatives and objectives during the enhanced community quarantine (ECQ),” Diokno said.
“Rest assured that the BSP, in coordination with the relevant government agencies, will continue to fulfill its mandate with the benefit of the Filipino people in mind,” Diokno added.
Tbill bids rejected
Meanwhile, the Bureau of the Treasury (BTr) rejected all bids in the auction of treasury bills yesterday amid lackluster demand and as rates came in higher as expected.
The auction was undersubscribed with total bids only reaching P14.5 billion, versus the P20 billion offering.
“(Those are) throw away bids. Preference to hold (on to) cash, with lingering virus,” said De Leon through Viber.
“Not serious bids. Expect this to continue,” she added, referring to higher bid rates and tepid demand.
Had the 91-day paper been approved, the rate would have been 3.841 percent, 81.7 basis points (bps) higher than previous average.
Tenders amounted to P7.53 billion, slightly higher than the P6 billion offer.
For the 182-day, they yield would have been 4.76 percent, 126.8 bps up from the previous rate.
Demand was weak at P4.12 billion, versus the P6 billion offer.
Lastly, for the one-year paper, the average would have been 5.35 percent, 179.3 bps higher than previous rate.
Tenders was also undersubscribed at P2.85 billion versus the P8 billion offering. –with Angela Celis
