T-bills fetch mixed results

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday fully awarded 91-day and 182-day Treasury-bills (T-bills), but partially awarded 364-day securities amid investors’ preference for short-term debt papers.

The 91-day T-bills fetched an average rate of 3.451 percent, 1.2 basis points higher than the 3.439 percent recorded in the previous auction.

The P5 billion offering was more that thrice oversubscribed, with total tenders reaching P15.09 billion.

Rates for six-month securities also averaged 3.934 percent, 2.4 basis points lower than the 3.958 percent fetched by the same securities last week.

The auction likewise met healthy demand, with bid applications reaching P10.49 billion.

On the other hand, the BTr partially awarded one-year T-bills after capping the rates at 4.35 percent.

As a result, the BTr sold P2.24 billion worth of 364-day securities at an average rate of 4.226 percent.

Total tenders amounted to P3.15 billion, almost twice lower than the P6 billion offering.

National Treasurer Rosalia de Leon said the results of the auction reflect the market’s preference for the shorter end of the curve, following the interest rate increase made by the Bangko Sentral ng Pilipinas (BSP).

De Leon said this preference tempered down the rates for the three-month and six-month notes.

“We see again the preference for the shorter-end, for the 91-day and 182-day. But we still see undersubscription for the 364-days given that (investors) are leaning more towards the shorter-dated bills coming from the BSP action last Thursday,” the treasurer said.

“Rates continue to trend upward given the expectations from some that there will still be additional rate hikes,” she said.

The central bank raised its interest rates by 25 basis points, bringing the rate in the overnight reserve repurchase facility to 3.25 percent.

Meanwhile, De Leon told reporters the government wouldwork with five Japanese banks for its planned samurai bond issuance.

She said the BTr is also beginning the ground work for a possible US dollar-denominated bond sale later this year, as part of its pre-funding activity before 2019.

“I think this time around we are more proactive given that we already expect what would be emerging developments in the market next year, so we are just seeing if we can have more lead time in terms of preparation for our funding for 2019,” De Leon said.