T-bills fetch mixed results

MANILA, Philippines — Short-term government securities yesterday fetched mixed results, with rates showing minimal movements ahead of the Bangko Sentral ng Pilipinas’ monetary policy meeting this week, according to the Bureau of the Treasury (BTr).

Rates for the 90-day Treasury bills (T-bills) averaged at 1.022 percent, 0.7 basis point higher than the 1.015 percent recorded last week.

The P5 billion offering was fully awarded as bid applications reached P16.218 billion.

Meanwhile, the average rate for the 182-day debt papers inched up by 0.1 basis point to 1.4 percent from 1.399 percent a week ago.

The BTr likewise made a full award of the P5-billion offering. It was almost three times oversubscribed, with total bids amounting to P14.84 billion.

On the other hand, the 364-day securities fetched an average rate of 1.686 percent, which was 0.9 basis point lower than 1.695 percent in the previous auction last week.

The auction was almost 4.5 times oversubscribed, with total tenders reaching P44.943 billion. The P10-billion offering was likewise fully awarded.

Overall, yesterday’s auction attracted P76 billion in total bids across all tenors, P20 billion of which was accepted.

In a text message to reporters, National Treasurer Rosalia de Leon said rates moved only slightly as the market expects the BSP to maintain interest rates during its last policy meeting for the year.

“There was minimal movement in rates as the market sees the Monetary Board on a stay mood for the Thursday policy meeting. Liquidity is bountiful with more than adequate bid cover across tenors,” she said.

Sought for comment, a bond trader said that yields were mixed, with investor preference currently in the longer tenors ahead of the holiday season.

“We observed that there’s slightly less appetite on the short-end recently because as we approach the holidays, most investors probably prefer to stay liquid,” the trader said.

Nevertheless, the trader said rates for the 91-day and 182-day T-bills remained in line with secondary market rates amid strong liquidity in the financial system.

Yesterday’s auction was already the second to the last scheduled by the BTr this year. The last auction will be held today, with P30 billion worth of seven-year debt papers to be offered.

The Philippines is programmed to borrow P3 trillion this year to plug the deficit in its budget, which is expected to widen to 7.6 percent of the gross domestic product (GDP) due to weak revenue generation and higher spending requirements amid the coronavirus pandemic.

According to the BTr, the government’s gross financing has already reached P2.835 trillion in the first 10 months, accounting for 95 percent of the program.