Short term T-bill rates lower on strong demand

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday fully awarded 91-day and 182-day Treasury bills (T-bills), but only partially awarded one-year securities as the market continued to show preference for shorter tenors.

As a result, rates for the 91-day T-bills stood at 3.437 percent, 1.4 basis points lower than the 3.451 percent recorded in the previous auction.

The P5 billion offering was more than thrice oversubscribed, with total tenders reaching to P16.01 billion.

Rates for 182-day T-bills stood at 3.879 percent, 5.5 basis points lower than last week’s level of 3.934 percent.

Healthy demand met the six-month debt papers as total bids reached P14.06 billion, more than three times larger than the original volume of P4 billion.

On the other hand, the market asked for higher rates for 364-day securities, prompting the Treasury to cap the accepted bids to temper the increase.

In the end, the papers fetched an average rate of 4.297 percent, 7.1 basis points higher than the 4.226 percent recorded last week.

The auction was slightly oversubscribed, with P8.79 billion in tenders as against the P6 billion offering.

National Treasurer Rosalia de Leon said the results of the auction reflect the market’s continued preference for the shorter end of the curve. She noted the strong demand especially for 91-day and 182-day securities, which both secured bids three times the issue size.

Still, De Leon said there was also demand for the one-year debt notes, given the ample liquidity after partial awards in the past auctions.