T-bills fetch lower rates

MANILA, Philippines — Short-term government securities yesterday fetched lower rates across the board as investors swarmed the Bureau of the Treasury (BTr)’s auction facility amid strong liquidity in the financial system.

Rates for the 91-day Treasury bills (T-bills) averaged at 0.969 percent, 1.5 basis points lower compared to the 0.984 percent recorded in the previous auction last week.

The P5 billion offering was fully awarded, while total tenders amounted to P17.33 billion.

Likewise, the average rate for the 182-day debt papers declined by 2.5 basis points to 1.323 percent from 1.348 percent a week ago.

The auction was more than six times oversubscribed, with P31.527 billion in total tenders. This prompted the auction committee to double the accepted non-competitive bids, bringing the total awarded volume to P7 billion instead of P5 billion.

Securities maturing in 364 days, meanwhile, fetched an average rate of 1.542 percent, four basis points lower than last week’s level of 1.582 percent after being fully awarded.

Total tenders amounted to P63.355 billion, more than six times larger than the offer size of P10 billion.

Overall, yesterday’s auction attracted P112.212 billion in total tenders, six times larger than the P20 billion offering. A total of P22 billion was awarded.

In a text message to reporters, National Treasurer Rosalia de Leon said rates dropped amid a strong appetite from investors. The demand was driven by the abundance of cash in the system, which was due to the huge amount of debt papers set to be redeemed this week.

“We have P67 billion in maturities this week. Market is overflowing with liquidity with bias on the front end of the curve,” she said.

Given the strong demand, the auction committee of the BTr decided to open the tap facility for the 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.