T-bill yields higher across all tenors

MANILA, Philippines — Short-term government securities yesterday fetched lower rates across the board due to easing investor concerns following the lowering of Taal Volcano status to alert level 3, according to the Bureau of the Treasury (BTr).

During yesterday’s auction, rates for the 91-day Treasury bills (T-bills) averaged at 3.297 percent, 9.3 basis points lower than the 3.39 percent recorded last week.

The P6 billion offering was more than three times oversubscribed, with total tenders amounting to P18.832 billion.

Likewise, the average rate for the 182-day debt papers went down by 5.5 basis points to 3.597 percent from 3.652 percent last week.

Total tenders reached P11.995 billion, almost two times higher than the P6 billion offer size.

The one-year T-bills, meanwhile, fetched an average rate of 3.963 percent, 0.8 basis points down from last week’s level of 3.971 percent.

Demand for the P8 billion offering, was healthy, reaching to P13.689 billion.

In an interview, National Treasurer Rosalia De Leon said results of the auction reflected the strong liquidity in the financial system.

De Leon said there is also ample appetite for the short-end of the curve.

“It’s really more of some of the uncertainties. First is Taal, knowing that the alert level has already been brought down,” De Leon said, referring to the Philippine Institute of Volcanology and Seismology’s decision to lower the alert status of Taal Volcano to level 3 last weekend.

“And of course, we were able to successfully raise 1.2 billion euros last week. And also we’ve announced the RTB (retail treasury bond) offering.We are having the auction tomorrow,” she said.

The Philippine government is planning to float at least P30 billion worth of three-year RTBs starting today until Feb. 6.

This tranche of RTB issuance also will have a switch tender component, as holders of RTBs maturing on April 11 may exchange their old debt notes for the new bonds.

De Leon expressed optimism that the upcoming RTB issuance this week would see huge demand, considering the tenor.

“First of all, we see that the tenor is three years, it’s something that right now would still have a strong appetite from investors, recognizing that it’s still within the intermediate part of the curve,” De Leon said.

“I think the BVAL (Bloomberg Valuation) rate right now also offers a good return in terms of real yields,” she added, referring to secondary market rates.