MANILA, March 21 (Reuters) - The Philippine central bank on Wednesday reduced the size of term deposits to be offered at its weekly auction on March 28 to 90 billion pesos ($1.73 billion) from 110 billion pesos in the previous sale.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla said the reduction was in anticipation of banks’ increased demand for cash ahead of the Easter holidays.
It will be “back to normal” after the holidays, he said, without elaborating.
The central bank will offer the amount in 7-day, 14-day and 28-day term deposit facilities (TDFs), which allow it to mop up liquidity.
The central bank offered 110 billion pesos at the weekly auctions over the five-week period that started on Feb. 21.
On Feb. 14, the central bank began offering a 14-day tenor and increased the offer by 20 billion pesos to 80 billion pesos, a day before it announced a 1 percent point cut in banks’ reserve requirement ratio. The offer was increased further to 110 billion pesos the following week.
For the March 28 auction, the offer comprises 50 billion pesos in 7-day TDF, 30 billion pesos in 14-day TDF, and 10 billion pesos in 28-day TDF.
It awarded 105.92 billion pesos worth of TDFs on Wednesday, with both the 14-day and 28-day tenors undersubscribed.
$1 = 52.1670 Philippine pesos Reporting by Enrico dela Cruz; Editing by Subhranshu Sahu