T-bills fetch lower rates across the board

MANILA, Philippines — Short-term government securities yesterday fetched lower rates across-the-board amid strong demand from investors, according to the Bureau of the Treasury (BTr).

During yesterday’s auction, the 91-day Treasury bills (T-bills) fetched an average rate of 1.024 percent, 3.4 basis points down from the 1.058 percent recorded last week.

Total tenders amounted to P33.058 billion, 6.5 times larger than the P5 billion offering.

Overwhelming demand, together with low rates, prompted the auction committee to double the non-competitive bids for the securities, resulting in a total awarded volume of P7 billion instead of P5 billion.

The BTr likewise upsized the accepted bids for the 182-day debt papers to P7 billion from P5 billion, as their average rate declined by 4.6 basis points to 1.453 percent from 1.499 percent a week ago.

The auction was about 7.5 times oversubscribed, with total tenders reaching P37.548 billion.

Lastly, the average rate for the 364-day T-bills inched down by 1.4 basis points to 1.745 percent from the 1.759 percent posted in the previous auction.

The P10 billion offering was fully awarded, as total bids amounted to P41.495 billion.

Overall, the auction attracted P112.1 billion in total bids, P24 billion of which was awarded.

In a text message to reporters, National Treasurer Rosalia de Leon said the results of the auction reflect the market’s preference for the short end of the curve amid strong liquidity in the financial market.

“Investors are risk averse with lingering uncertainties on the pandemic, US President Donald Trump contesting election results, and Senate runoff elections in Georgia, plus the fate of a bigger stimulus package,” de Leon said.

Given the healthy demand and the low rates, de Leon said the auction committee decided to open the tap facility for one-year securities for an additional offer volume of P5 billion.

Meanwhile, de Leon reminded investors that the launch of the second tranche of the government’s premyo bond offering would be held tomorrow.

With the theme “Better Investment, Bigger Panalo,” the premyo bonds will have a tenor of one-year, carrying quarterly coupon payments, as well as chances to win prizes during quarterly draws.

“(This is) not only a secure and affordable, but also accessible and safe way to invest. Plus (there are) chances to win big prizes,” de Leon said.

The BTr seeks to raise at least P3 billion from the fund raising activity which will run until Dec. 11.

It will have a switch tender component, which means holders of premyo bonds issued last year will get a chance to swap their debt papers for the new securities.

De Leon also reiterated that the government would unveil another mobile application for participants of the premyo bond sale.