T-bill rates up across the board

MANILA, Philippines — Rates for short-term debt papers rose across the board due to the market’s anticipation of a Retail Treasury Bond (RTB) issuance this quarter, the Bureau of the Treasury (BTr) said yesterday.

During yesterday’s auction, the BTr decided to partially award the 91-day and 364-day T-bills, while fully awarding the 182-day securities.

In particular, the 91-day T-bills fetched an average rate of 5.733 percent, 18.3 basis points higher than the 5.55 percent recorded in the previous auction.

The P6 billion offering was slightly oversubscribed with total tenders amounting to P7.03 billion, but only P4.39 billion was awarded.

Meanwhile, average rates for the 182-day T-bills inched up by 4.5 basis points to 5.978 percent from last week’s level of 5.933 percent.

Healthy demand met the P6 billion offering, with total bids reaching more than twice at P13.874 billion. The auction committee made a full award on this tenor.

Lastly, rates for the 364-day debt notes reached 6.052 percent or 6.9 basis points up from 5.983 percent in the previous auction.

Total tenders for this tenor only reached P7.958 billion, slightly below the P8 billion offering. However, only P5.208 billion was awarded.

“Overall, tenders is about one and a half times, if you look at it on an aggregate basis, although majority of the demand came in at the 182-day,” Deputy Treasurer Erwin Sta. Ana said in an interview after the auction.

However, Sta. Ana said investors sought higher interest rates due to supply concerns, especially with a prospective RTB issuance on the horizon.

“Feedback from the reports are basically a supply concern, with respect to a prospective RTB issue. So looks like GSEDs (government securities eligible dealers) are factoring in that issuance,” he said.

According to the deputy treasurer, the government is looking to issue the RTBs within the first quarter.

Should the fund raising activity pushes through, Sta. Ana said the BTr would launch its online RTB platform to provide individual investors more channels to access the retail issuance.

“If ever we launch the RTBs, there will be a component of online, which means individual investors can access our website and there will be an ordering form at the BTr website,” he said.

“We’re not closing the over-the-counter (access) with the bank branches and the usual channels of distribution, but this is just giving investors another avenue to directly order RTB from the Treasury itself,” he said.

Sta. Ana said the BTr would be tapping government financial institutions (GFI), namely, Land Bank of the Philippines and the Development Bank of the Philippines, as well as other GSEDs for the fund raising activity.