The weekly securities auction of the Bangko Sentral ng Pilipinas (BSP) garnered P100 billion.

According to BSP Deputy Governor Francisco Dakila Jr., the central bank’s one-month BSP bill was oversubscribed by 1.58 times the offered volume of P100 billion, resulting in a total of P158.20 billion in bids amid considerable demand from market participants.

He said in a statement that the 28-day BSP bill’s weighted average interest rate stayed constant at 1.8115 percent, down from 1.8158 percent last week. The accepted yields dropped slightly lower during the auction and remained narrow at 1.780-1.825 percent.

Dakila added that the auction results demonstrate continued robust demand for the BSP bill from market participants under normal market conditions, as well as significant liquidity in the financial system.

“Moving forward, the BSP’s monetary operations will continue to be guided by its latest assessment of liquidity conditions and market developments,” he also emphasized.

BSP securities is a monetary instrument issued by the BSP for its monetary-policy implementation and liquidity-management operations under the interest rate corridor framework.

Along with government-issued securities that may be exchanged for liquidity, the securities would add to the pool of risk-free assets in the financial system.

The issuing of such securities can help with greater price discovery for debt instruments and support monetary policy transmission through frequent auctions of BSP securities.

Republic Act (RA) 11211 reinstated the central bank’s authority to issue negotiable certificates of indebtedness even in normal times. RA 11211, or the “New Central Bank Act of 1993,” was signed into law in February 2019.

Prior to the amendment, debt offers by the Bangko Sentral were only permitted in the event of extreme price fluctuations.

BSP Governor Benjamin Diokno previously said that the monetary authorities were still looking for ways to strengthen the securities and make them more market-friendly.