T-bills mixed on renewed tighter lockdowns

MANILA, Philippines — Rates for short-term government securities were mixed yesterday on concerns that authorities may revert select areas into tighter lockdowns due to risks posed by the COVID Delta variant.

The Bureau of the Treasury yesterday issued in full P15 billion in Treasury bills (T-bills) in an auction oversubscribed by nearly three times.

The rate for the 91-day tenor dropped by 3.2 basis points to 1.050 percent while the 182-day debt papers rose by 0.6 bps to 1.407 percent. Tenders for the T-bills reached P18.327 billion and P13.750 billion, respectively.

On the other hand, the rate for the 364-day T-bills rose by 0.9 bps to 1.638 percent. Bids for the full-year securities exceeded more than twice at P10.950 billion.

National Treasurer Rosalia de Leon said rates for the short-dated debt papers moved sideways due to investors fears that the government may heighten quarantine restrictions to contain the spread of the highly transmissible Delta variant.

“[T-bill rates] moved sideways amid growing concerns on possible stricter restrictions,” De Leon said in a text message to reporters.

President Duterte last week placed Metro Manila, Ilocos Norte and Ilocos Sur under general community quarantine with heightened restrictions until July 31, reimposing the age regulations and extending curfew hours to prevent individuals from leaving their homes.

De Leon said liquidity would remain in the markets especially for the August round of auctions, as buyers look for investments where they can receive yields in the long term.

The Treasury will hold a last round of auction for July tomorrow. Up for sale is the reissued seven-year Treasury bonds (T-bonds) worth P35 billion that bond traders expect to fetch a rate of up to 3.700 percent.

Traders told the STAR that investors will look at the direction of the peso-dollar exchange this week in making decisions at government auctions. Likewise, they said investors may exploit the rising yields as a result of the downgrade threat from credit rating agencies.

Further, they said the next auctions may be influenced by the results of the scheduled meeting of the US Federal Open Market Committee today and tomorrow.

Similarly, they warned that investors may stay off the auctions, or demand increased rates, if the government fails to address the spread of the Delta variant here.