BSP term deposit yields drop amid rate cut expectations

Yields on Bangko Sentral ng Pilipinas (BSP) term deposits and short-term securities decreased slightly on Friday due to strong demand amid expectations of a rate cut.

The BSP received P153.009 billion in bids for the P121.684-billion offering, with accepted yields ranging from 5.645% to 5.816%, narrowing compared to previous weeks.

For one-month papers, tenders reached P41.684 billion, while for two-month papers, they amounted to P111.325 billion, both allowing full awards by the BSP.

The average rate of one-month term deposits declined by 4.39 basis points to 5.7782%, and the two-month papers' average rate dropped by 8.59 bps to 5.743%.

Analysts expected a 25-basis-point reduction in the target reverse repurchase rate to 5.5% from 5.75%, marking the BSP's first easing move since December, driven by lower inflation and global crude oil prices.