BTr upsizes T-bill award to P30.2 billion

MANILA, Philippines — The Bureau of the Treasury (BTr) upsized the volume of Treasury bills (T-bills) awarded yesterday as strong demand continued to pull down rates across-the-board for the short-dated securities.

The BTr raised P30.2 billion from yesterday’s auction, more than the original P25 billion offered from total tenders of P97.24 billion, making the offer almost four times oversubscribed.

This prompted the auction committee to double the accepted non-competitive bids for the 91-day and 182-day securities.

Average yield for the benchmark 91-day T-bills fell further to 1.278 percent from 1.306 percent in the previous week’s auction, while that for the 182-day debt papers fell to 1.549 percent from 1.629 percent last week.

Yield for the 364-day debt paper, meanwhile, continued to fall to 1.829 percent from 1.863 percent last week.

As liquidity in the system remained abundant, the BTr is raising P7 billion more from one-year securities through its tap facility.

“There was strong market presence in the auction with rates declining across all tenors,” National Treasurer Rosalia de Leon told reporters yesterday.

The prevailing low interest rate environment, she said, is encouraging for the government at a time when it needs to increase borrowings for its pandemic response.

Amid an uncertain environment, markets are also turning to safe haven assets to park their funds.

Should the Bangko Sentral ng Pilipinas (BSP) keep rates steady in its meeting this month, the government may “continue repositioning its debt portfolio toward local currency,” De Leon said.

The BSP is widely expected to keep its policy rate unchanged at two percent, possibly for the rest of the year, to ease inflationary pressures and support the economy as it recovers from a pandemic-induced fallout.

“Markets see BSP providing continued anchor for economic rebound,” said De Leon.

BTr has maintained a higher borrowing program for May to take advantage of ample liquidity in the system and strong demand for safe assets.

Treasury is raising P170 billion from the domestic bond market this month, the same level of borrowing in April and up from the programmed P160 billion in March.

Programmed were P25 billion in short-term debt papers to be be auctioned every Monday beginning May 3 for a total of P100 billion.

These weekly Treasury bill offers will be composed of P5 billion for those with 91-day tenor, P8 billion for 182-days tenor, and P12 billion for P364-day tenor.