Gov’t fully awards Treasury bills as rates drop on strong demand

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Monday as rates declined on pent-up demand from investors.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Monday as total bids reached P71.05 billion, almost five times the initial offer.

Monday’s bids were also higher than the P52.758 billion logged when the Treasury offered P10 billion in T-bills in December.

Broken down, the Treasury bureau raised the programmed P5 billion via the 91-day debt papers from P24.14 billion in bids. The three-month T-bill fetched an average rate of 1.075%, down by 5 basis points (bps) from the 1.125% seen at the previous offering.

The BTr also borrowed P5 billion as planned from the 182-day securities it offered on Monday as bids reached P24.32 billion. The average rate of the six-month T-bill plummeted by 15.9 bps to 1.269% from 1.428% previously.

Lastly, the government made a full P5-billion award of the 364-day T-bills as the tenor attracted tenders worth P22.59 billion. The average yield on the one-year instrument stood at 1.6%, falling by 4.9 bps from the 1.649% fetched previously.

At the secondary market prior to the auction on Monday, the 91- 182- and 364-day T-bills were quoted at 1.0945%, 1.2693% and 1.6597%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

National Treasurer Rosalia V. de Leon said in a Viber message the rates dropped on expectations of slower December inflation amid oil price rollbacks.

A BusinessWorld poll of 13 analysts last week said December inflation was likely at 3.9%, or the midpoint of the central bank’s forecast of 3.5% to 4.3% for the month.

The central bank earlier raised its 2022 inflation forecast to 3.4% from 3.3% amid food supply constraints, petitions for transport fare hikes, and global supply chain issues.

Meanwhile, a bond trader in a Viber message said T-bill rates fell due to pent-up demand because there were no T-bill auctions in the last two weeks.

The government plans to borrow P200 billion from the domestic market this month, or P60 billion via T-bills and P140 billion from Treasury bonds (T-bonds).

On Tuesday, the BTr will offer P35 billion in reissued seven-year T-bonds with a remaining life of six years and seven months. — Jenina P. Ibañez