BTr awards P20-B short term T-bills

MANILA, Philippines - The government’s Treasury bill sale drew strong demand yesterday, reflecting investors’ preference for short-dated debt securities.

During yesterday’s regular weekly auction, the Bureau of the Treasury  raised P20 billion in fresh funds as banks snapped up safe haven debt instruments.

The 91-day paper fetched an average rate of 1.397 percent, down 14.4 basis points. Bids reached P28.29 billion or more than three times the amount on offer.  Despite strong demand, the government stuck to its original borrowing plan and accepted only P8 billion.

The rate for the six-month debt paper fetched  1.699 percent, also lower than the previous result of 1.758 percent.  The government received bids worth about P19.85 billion or three times its debt offering of P6 billion.

The longest-dated T-bills, for 12 months, yielded 1.948 percent, slightly higher than the previous rate of 1.947 percent.  Demand outstripped the amount placed by more than two times.

National Treasurer Roberto Tan said  investors offered aggressive bids but still reflective of market price conditions.

“We rejected all bids last month so investors were naturally looking for new supply,” Tan said.

Rates for government securities are used by banks as benchmarks for the pricing of their own loans to businesses and consumers.

Meanwhile, Tan said the BTR would be meeting with market participants to discuss any lingering issues concerning the  transition to a no-restricted trading across all peso denominated government securities.

“We will meet this week.  Hopefully we can set a definite timetable on the implementation of non-restricted trading,” Tan said.

This initiative which will allow government securities to be traded between various entities, regardless of their tax category or classification, in any accredited government securities trading market, was originally scheduled to be implemented last Nov. 24 but the BTR moved it to ensure a smooth roll out of this landmark program.

Tan said the extension should allow all market participants to conclude preparedness for activities in relation to account setup, access to relevant systems,market-wide and end-to-end testing and required documentation.