T-bills fetch mixed results

MANILA, Philippines — Treasury bills (T-bills) fetched mixed results as investors showed preference for securities with shorter maturity, the Bureau of the Treasury (BTr) reported yesterday.

During yesterday’s auction, the BTr was able to raise the P7.264 billion as it fully awarded the 91-day T-bills, while partially awarding the 81-day debt papers and rejecting all offers for the 364-day securities.

The three-month T-bills fetched an average rate of 5.614 percent, 0.2 basis points higher than the 5.612 percent recorded during the previous auction.

Investors swarmed the short-term debt papers with total tenders amounting to P9.587 billion, more than double the P4 billion offer volume.

Meanwhile, the average rate fetched by 182-day securities rose by 0.5 basis points to 5.987 percent after the auction committee decided to cap the accepted rates.

Total tenders amounted to P7.819 billion, higher than the P6 billion offer size. However, only P3.264 billion of this amount was awarded.

Lastly, the auction committee rejected all of the P7.378 billion worth of tenders for the 364-day T-bills.

Had the Treasury decided to fully award the securities, they would have fetched an average rate of 6.131 percent, 7.9 basis points higher than the 6.052 percent last week.

“We made the full rejection on the 364-day because the committee actually deems it quite high at this level, given the short work week and of course, the banks’ need for liquidity over the long holidays,” Deputy treasurer Erwin Sta. Ana told reporters after the auction.

According to Sta. Ana, investor preference is now on the shorter end of the curve as they are still on a lookout for more catalysts.

“I think because there’s really no major data or report within the week, so I think it’s safer for them to park it at the shortest tenor,” he said.

Meanwhile, Sta. Ana confirmed that the BTr is studying the possibility of reducing the size of its planned panda bond issuance. Previously, the BTr said it is eyeing an initial volume of $500 million for the fund raising activity.

“Finance Secretary Dominguez already mentioned in his previous interviews that the size as originally planned may be reduced considering where we are in terms of disbursements. The budget is still reenacted at this time,” Sta. Ana said.