MANILA -- The rates of Philippine Treasury bills (T-bills) rose across-the-board Monday but Deputy Treasurer Erwin Sta. Ana said the upticks are within their expectations, thus, the full award for all tenors.
The average rate of the bellwether 91-day securities rose to 4.952 percent from 4.404 percent during the auction last October 8. Bids for the tenor were fully rejected during the auction last Oct. 15 due to demands for higher yields that the auction committee deemed unreasonable.
Sta. Ana said there was “some correction” for the facility, citing that demand for yields in this week’s T-bill auction “is a little bit lower than last week.” “So we are thinking that is also an indication, some view it as inflation peaking already. So it’s a good sign,” he said.
The tenor was offered for PHP4 billion and tenders reached PHP7.317 billion.
Relatively, the rate of the 182-day paper rose to 6.059 percent from 5.894 percent during the auction last October 15.
It was offered for PHP5 billion and received PHP7.343 billion bids.
The 364-day T-bill’s rate increased to 6.489 percent from 6.256 percent in the previous auction.
Banks submitted a total of PHP9.850 billion-worth of bids, higher than the PHP6 billion offering.
Sta. Ana said that “for the 182- and 364- I think the increments are quite reasonable from our end.”
He attributed the stronger demand for T-bills this week to high liquidity situation in the domestic economy.
“(What) we are thinking is there is still reasonable liquidity going on so the dealers are just waiting for some updated information on whether they should come into the auction or wait for a little bit more time, “ he said.
He also noted that “given what I said about the 91-day looks like they are getting some clarity at least with respect to the very short term horizon of interest rates.”
Meanwhile, Sta. Ana said the planned issuance of US dollar-denominated bond in the last quarter of this year remains on track but declined to give specifics, saying he has not talked with National Treasurer Rosalia de Leon about the outcome of the road show in Asia and US that she led for the issuance.
He, however, stressed that “depending on what happens on the next couple of weeks we are still on schedule as far as the US dollar offering is concerned.”
The plan is to issue USD1.5 billion worth of dollar-denominated bond, the issuance of which will be the second for the government for this year after the USD2 billion worth of 10-year bond. Tenor is still being considered.
If this pushes through, it will also be the fourth in terms of foreign borrowing for the government after the 1.46 billion renminbi-denominated three-year Panda bond issuance last March; and the multi-year 154.2 billion Japanese yen Samurai bond last September.
Sta. Ana also said that they are considering to issue either three or five-year retail treasury bond (RTB) in the last quarter of 2018 or first quarter of 2019, noting that assessment of the path of interest rate, as well as market conditions continues.
He said the BTr has tapped the government-owned Land Bank of the Philippines (Landbank) to test the online platform for the issuance, the volume of which is still being studied. “So (it) looks like it’s quite good at this stage so we are receiving transactions as we should,” he said, adding that they target to finish the testing by end-October. (PNA)
