MANILA, Philippines — The government finally made a full award of P15 billion in short-term securities after three months as demand soared and rates slipped in anticipation of a pause in the rate hike cycle of the Bangko Sentral ng Pilipinas (BSP).
The Bureau of the Treasury yesterday made a full award of P15 billion in T-bills, its first time to do so in 14 weeks or since Feb. 6.
Investors also swarmed the auction with demand hitting P58.596 billion, the highest bids for T-bills in over three months or since the P61.85 billion in offers on Jan. 30.
Rates were down for the three- and six-month tenors, while yields slightly went up for the one-year offer, but the Treasury still made a full award across the board for P5 billion each.
Rates were already expected to decline this week ahead of the policy meeting of the BSP this Thursday, May 18.
Market consensus is for the BSP to finally take a pause after raising key policy rates nine times since May last year.
This developed amid the continued downtrend in inflation as well as the better-than- expected economic growth during the first quarter.
The benchmark rate is currently at a 16-year high of 6.25 percent after the BSP delivered a total of 425 basis points in one year.
Meanwhile, rates for the 91-day T-bills went down by 4.3 basis points to 5.874 percent from the secondary rate of 5.917 percent and below last week’s 5.891 percent.
The 182-day short-dated debt papers saw rates go down by 6.6 basis points to 5.991 percent from the reference rate of 6.057 percent. This was also lower from last auction’s 6.109 percent.
On the other hand, rates averaged 6.028 percent for the 364-day T-bills, 3.4 basis points above the secondary rate but down from last week’s auction rate of 6.211 percent.
Despite the increase, the Treasury fully awarded the entire P5 billion for the one-year tenor.
Overall demand for the short-term securities jumped by 29 percent to P58.596 billion from last week’s P45.354 billion. The auction was oversubscribed by 3.91 times.
Bids likewise went up across the board to P14.642 billion, P14.271 billion and P30.683 billion for the three, six and 12 months, respectively.
For this month, the Treasury targets to borrow P175 billion from the local debt market.