T-bills fetch mixed results

MANILA, Philippines — Short-term government securities yesterday fetched mixed results as rates for the 91-day Treasury bills (T-bills) slightly inched up, while yields for the 182-day and 364-day debt papers declined amid strong demand from investors.

During yesterday’s auction, the Bureau of the Treasury (BTr) fully awarded P5 billion worth of 91-day T-bills at an average rate of 0.984 percent, 0.7 basis point higher than the 0.977 percent recorded last week.

The offering was more than 3.5 times oversubscribed, with total tenders amounting to P17.76 billion.

On the other hand, rates for the 182-day securities averaged at 1.348 percent, 1.2 basis points lower compared to the 1.36 percent recorded a week ago.

Strong demand met the P5 billion offering as total tenders was almost five times higher at P24.296 billion.

This, along with lower rates prompted the auction committee to double the accepted non-competitive bids for the issuance, resulting in a higher awarded volume of P7 billion.

Meanwhile, the average rate for the 364-day debt notes dropped by 2.3 basis points to 1.582 percent from 1.605 percent last week.

The P10 billion offering was fully awarded, while total tenders reached P45.055 billion.

Overall, the auction attracted P87.11 billion in total tenders. The total awarded volume reached P22 billion, higher than the P22 billion initial offer size.

National Treasurer Rosalia de Leon said the results of the auction reflect the robust liquidity condition of the market.

“Liquidity remains strong, particularly on the front-end with assuring statements from (BSP) Governor (Benjamin) Diokno to continue supportive policies for economic rebound, as well as Fed’s (US Federal Reserve Chairman Jerome) Powell message to keep rates low,” De Leon said in a text message to reporters.

A bond trader, meanwhile, said strong demand from investors, driven by ample liquidity in the financial system, pushed down rates during yesterday’s auction.

However, the trader said there was some decline in the 91-day as investors may no longer be comfortable getting a rate below 0.9 percent for the securities.

As for the 182-day and 364-day T-bills, the trader said the market may still see a continued downtrend in their rates due to strong liquidity.

Given the strong demand, the auction committee of the BTr decided to open the tap facility for 364-day debt papers to raise an additional P10 billion.

The government is programmed to borrow P3.03 trillion this year from domestic and external sources to bridge the deficit in its budget, which is expected to widen to 8.9 percent of the gross domestic product.

For January, alone, the BTr is targeting to raise P140 billion from domestic issuances.