The central bank has withdrawn more than ₱1 trillion of excess liquidity from the financial system through its monetary operations, according to the latest data.
As reported in the BSP’s Monetary Policy Report for June 2026, open market operations soaked up ₱1.3 trillion in liquidity from the financial system by June 9.
“The BSP’s monetary operations have kept the overnight reverse repurchase rate in line with the target,” the report noted.
Over half of the absorbed liquidity—52.3 %—came from the overnight reverse repurchase (RRP) facility.
The overnight deposit facility contributed roughly a fifth, or 21.5 %, of the total liquidity withdrawn.
BSP securities accounted for 19.2 %, while the term deposit facility (TDF) provided 6.9 %.
The central bank employs tools such as the overnight RRP facility, the TDF, and BSP securities to drain excess liquidity and steer market yields toward its policy rate.
At the July 10 auction, the weighted average yield on 28‑day BSP bills was 4.73 %, up 2.04 basis points from the previous week’s 4.7096 %.
The seven‑day term deposit rate rose 2.63 basis points week‑over‑week to 4.7079 %, from 4.6816 %.
The central bank has limited its TDF and BSP securities offerings to a single tenor to streamline liquidity operations and focus on tenors that enhance monetary‑policy transmission.
In its latest report, the BSP said policy‑rate transmission remained effective, noting that the April 25‑basis‑point rate hike is already showing up in short‑term TDF and BSP bill yields.
In April, the central bank lifted benchmark rates for the first time in two‑and‑a‑half years, reacting to inflation pressures stemming from the Middle East conflict.
It added another 25‑basis‑point increase last month to sustain the tightening cycle, pushing the target RRP rate to nearly a one‑year high of 4.75 %.
The central bank estimates that monetary policy measures typically take one‑and‑a‑half to two years to fully transmit through the financial system. — Katherine K. Chan
Also Read
- Hillsborough Law Bill Set for Parliamentary Approval
- Knesset Committee Advances Measure Suspending Detention for Ultra-Orthodox Draft Evasion
- Sheikh Hamad bin Khalifa Al Thani, Former Emir of Qatar, Passes Away at 74
- Former Qatar Monarch Remembered as Humble Leader with Sharp Humor by Ex-UK Diplomat