T-bills fetch lower rates

MANILA, Philippines — Short-term government securities yesterday fetched lower rates across the board amid strong liquidity in the market as well as expectations of monetary policy easing, according to the Bureau of the Treasury (BTr).

During yesterday’s auction, the 91-day Treasury-bills fetched an average rate of 3.769 percent, 11.4 basis points lower than the 3.883 percent recorded during the previous auction last week.

Total tenders reached P12.41 billion, more than three times higher than the P4 billion issuance.

Meanwhile, rates for the 182-day T-bills averaged 4.1 percent, 13.8 basis points down from last week’s level of 4.238 percent.

The P5 billion offering was more than five times oversubscribed, with total tenders amounting to P25.66 billion.

Lastly, the average rate for 364-day debt papers declined 21.7 basis points to settle at 4.519 percent from the 4.736 percent posted in the previous auction.

Total bids for the securities reached P36.252 billion, more than six times larger than the P6 billion offer volume.

In an interview, National Treasurer Rosalia De Leon said the BTr is “pleased” with the results of the auction, adding they exceeded expectations.

“Earlier, in our survey, the comments made by the banks, particularly for the 91 day, is that it would move by five to 10 basis points. But as we saw…(rates) all across the tenor buckets are expelled by more than 10 basis points,” De Leon told reporters.

She said the higher-than-expected decline in the rates could be attributed to stronger market liquidity, as well as expectations of policy easing both on the part of the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.

“It shows the market expectations. First, by the end of July, we’ll see again a 50-basis point cut in terms of the reserve ratio requirement,” De Leon said.

Meanwhile, De Leon also mentioned that the BTr is leaning toward issuing three-year, five-year, and 10-year securities for its samurai bond issuance, which is set before the start of the Ghost Month celebrations.