T-bills fetch mixed results

MANILA, Philippines — Short-term government securities yesterday fetched mixed results as rates for 92-day and 183-day Treasury bills (T-bills) declined, while yields for 365-day debt papers increased, the Bureau of the Treasury (BTr) reported yesterday.

During yesterday’s auction, the BTr fully awarded P4 billion worth of 92-day T-bills at an average rate of 5.563 percent, 4.5 basis points lower than the 5.608 percent recorded in the previous auction.

The offering was more than twice oversubscribed, with total tenders amounting to P9.85 billion.

The average rate for 183-day debt notes likewise dropped by 1.8 basis points to 5.978 percent from 5.996 percent last week, prompting the auction committee to fully award P5 billion of the securities.

Healthy demand met the auction, as total bids reached P10.947 percent or more than twice the offer size.

On the other hand, the BTr decided to cap the awarded volume for one-year T-bills to temper down the rates asked by investors.

As a result, the securities fetched an average rate of 6.085 percent, which is still higher than last week’s level of P6.052 percent by 3.3 basis points.

This is, however, lower than the 6.105 percent secondary market rate for the same securities, which was used by the auction committee as reference for the award.

“The committee just decided to keep the rates at secondary market levels. So we decided that for the one year we have to keep it at the current market levels,” Deputy Treasurer Erwin Sta. Ana told reporters after the auction.

Total tenders for the 365-day bills reached P8.46 billion, slightly higher that the P6 billion auction size.

Meanwhile, Sta. Ana reiterated that the Philippine government would wait for the conclusion of the roadshow in Europe before finalizing the terms of the proposed Euro-bond offering.

“For this week, we will roundup the deal roadshow. We are going to several cities and next week we will decide when to price,” he said.

According to Sta. Ana, the proposed fund raising activity was part of the Philippine government’s strategy to diversify its funding sources.

He said the government has decided to tap the euro market given good market conditions. 

“It has been a work in progress for quite sometime and we felt that given market conditions, it is opportunistic for us to go back to the euro market,” the official said.