Investors gobble up P15 billion T-bill offer

Mary Grace Padin (The Philippine Star) - May 20, 2020 - 12:00am

MANILA, Philippines — The Bureau of the Treasury (BTr) made a full award of P15 billion worth of 35-day debt papers as interest rates declined amid strong demand from investors.

During yesterday’s auction, Treasury bills maturing in 35 days fetched an average rate of 2.024 percent, 1.8 basis points lower than the 2.042 percent recorded in the previous auction.

This was likewise lower than the secondary market rate for comparable securities, or in this case, one-month debt papers, which settled at 2.266 percent yesterday.

The P15 billion offering was more than twice oversubscribed, with total tenders amounting to P33.42 billion.

In a text message to reporters, National Treasurer Rosalia De Leon said the results of the auction reflected investor’s strong appetite for the short-term debt notes.

“(We) saw sustained strong investor preference for the short-end, with twice the subscription for the P15 billion offering. Rates further declined from the previous 35-day auction,” she said.

Given the strong demand from investors, De Leon said the auction committee decided to open the tap facility for 35-day T-bills for a total volume of P10 billion.

Meanwhile, the BTr, through its tap facility has also raised an additional P5 billion from sale of 364-day securities yesterday.

Earlier, de Leon said the market continues its “flight to safety” amid the uncertainties caused by the coronavirus disease 2019.

She said the market still prefers government securities amid healthy liquidity in the financial system, which resulted from the “supportive actions” of the Bangko Sentral ng Pilipinas.

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