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

The one-month bill was oversubscribed by 1.87 times the offered volume of P100 billion, resulting in a total of P186.61 billion in bids, according to BSP Deputy Governor Francisco Dakila Jr..

The weighted average interest rate on the 28-day bill continued to fall, closing at 1.7844 percent, down 1.779 basis points, he said in a statement. Accepted yields declined at the same time, remaining within a narrow range of 1.770-1.789 percent.

Dakila added that the “auction results continue to show market participants’ sustained strong interest in the 28-day bill amid ample liquidity in the financial system. Looking ahead, the BSP’s monetary operations will remain guided by its latest assessment of liquidity conditions and market developments.”

These securities are monetary instruments issued by the central bank 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 by the central bank.

Republic Act (RA) 11211 restored the Bangko Sentral’s right to issue negotiable certificates of obligation, 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, the central bank could only issue debt offerings if there were unusual price swings.

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.