P15-B T-bill issue awarded in full

MANILA, Philippines - The Bureau of the Treasury (BTr) made a full award of P15 billion in Treasury bills during yesterday’s auction amid robust market demand for government securities.

During yesterday’s auction, the 91-day T-bills fetched an average rate of 2.176 percent, 1.3 basis points lower than the 2.189 percent recorded in the previous auction.

This was also lower than the secondary market rates for the same securities, which settled at 2.9686 percent.

Total tenders amounted to P15.801 billion, more than twice the P6 billion offering.

On the other hand, the average rate for six-month securities rose 3.3 basis points to 2.529 percent from the 2.496 percent recorded in the previous auction. This was, however, lower than the secondary market rate of 2.9939 percent for 182-day T-bills.

The P5 billion offering was oversubscribed with P7.94 billion in total tenders.

The 364-day T-bills fetched an average yield of 2.972 percent, 2.3 basis points lower than the 2.995 percent in the previous auction. It was likewise lower than the 3.0254 percent secondary market rate for one-year securities.

Total tenders reached P8.178 billion, more than twice the P4 billion issuance.

National Treasurer Rosalia De Leon said the results of the auction reflects market’s strong demand for short-dated papers.

“We see again the appetite of the market on the short-end of the curve, on the short-dated tenors given, I think, already coming out of the FOMC (US Federal Open Market Committee meeting) minutes,” De Leon told reporters after the auction.

“At the same time, the central bank (Bangko Sentral ng Pilipinas) said there’s no pressure to raise rates. Also the survey of economists about the inflation path is still below three percent. There’s no compelling reason to raise rates at this time,” she said.

De Leon said the market continued to prefer the short term debt paper as the US Federal Reserve has indicated that it is looking into unwinding its bond portfolio starting the next few months.

She said the Treasury expects investors to still adopt a wait-and-see behavior in the medium term considering the prospect of US rate hike by year-end.

At the moment, the national treasurer said the country’s cash position remains healthy, and it is ready to support the heavy expenditures planned by the government.

Meanwhile, De Leon said the BTr is now awaiting the approval of the People’s Bank of China for the Philippines’ maiden issuance of renminbi-denominated bonds or panda bonds.

“I think we’re doing well. We’re on track. We’re just waiting for some other approvals,” she said.

De Leon said the amount for the issuance will still be determined depending on the appetite of the market, as well as the conditions in the onshore renminbi market. The government is also looking into bonds with three to five years of tenor, she added.