Mixed T-bill results as Bureau of the Treasury caps bids

MANILA, Philippines — Investors sought higher rates for short-term securities yesterday, prompting the Bureau of the Treasury (BTr) to reject all bids for 91-day and 364-day Treasury bills (T-bills), and partially award the 182-day debt papers.

Had the 91-day Treasury bills been fully awarded, the securities would have fetched an average rate of 5.776 percent, 4.3 basis points higher than the 5.733 percent recorded in the previous auction for the same debt papers two weeks ago.

However, the P6 billion offering gathered healthy demand, with total bids amounting to P8.893 billion.

Meanwhile, the average rate for the 182-day T-bills remained steady at 5.975 percent after the auction committee decided to cap the accepted rates for this tenor.

As a result, only P3.939 billion of the P6 billion offer size was awarded, despite the oversubscription for the securities amounting to P11.569 billion.

Had the auction committee fully awarded the securities, it would have fetched an average rate of 5.988 percent, higher than the previous rate of 5.978 percent. 

Lastly, the auction committee also decided to reject tenders for the 364-day debt notes after investors sought rates averaging 6.114 percent. This is 6.2 basis points higher than the 6.052 percent fetched by the same securities in its previous auction.

The P8 billion offering was oversubscribed, with total tenders reaching P11.34 billion.

In an interview, National Treasurer Rosalia de Leon said the BTr decided to reject tenders as it sees no reason to accept higher rates.

She said there is room for the BTr to reject the bids, particularly for three month and one-year securities, given the large demand for five-year retail Treasury bonds (RTBs), which the agency is currently offering.

 “Given the outlook for inflation, for February, it’s continuing to go down. The trend of inflation is declining so there’s really no room for rates to be going up,” De Leon said.

 “And then of course, we see the strong outturn for the RTBs. There’s really reason for us to reject the 91- and 364- (day) and partially accept the 182,” she said.

According to De Leon, the government’s RTB sale, which is open to the public until March 8, has received good reception, with total orders breaching P170 billion as of Friday.

“What is really more exciting or pleasing to us is the reception on the online and the participation of the small investors,” she said.

In particular, De Leon noted that small investors with investments amounting to P5,000 (the minimum allowable investment) comprised about 64 percent of the total orders in the Treasury’s online RTB platform.