Tight liquidity in the local financial system for the second week in a row pushed yields on the central bank’s anti-inflation management facility higher on Wednesday, aggravated by banks’ muted interest in the short term deposits.
At the weekly auction for the term deposit facility of the Bangko Sentral ng Pilipinas, interest rates across all three tenors rose even as the longer-dated instruments continued to be undersubscribed, echoing the previous week’s results.
“There is no [cash] volume in the market,” said the treasurer of a commercial bank speaking on condition of anonymity. “And there is little appetite among banks for the TDF right now. But it’s more a situation of tight liquidity.”

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