MANILA -- The Bureau of the Treasury’s (BTr) auction committee fully awarded all tenors of its Treasury bills (T-bills) Monday even with the uptick in rates.
Average rate of the bellwether 91-day T-bill rose to 5.295 percent from 5.172 percent during the auction last November 12.
BTr offered it for PHP4 billion and bids amounted to PHP4.74 billion.
Rate of the 182-day bill inched up to 6.280 percent from 6.245 percent last week.
It was offered for PHP5 billion and tenders were more than twice at PHP11.928 billion.
The 364-day paper’s average rate rose to 6.530 percent from 6.521 percent previously.
Investors submitted a total of PHP13.621 billion-worth of bids, more than twice the PHP6 billion offering.
National Treasurer Rosalia De Leon cited the oversubscription during Monday’s auction, which she attributed to anchoring of investors’ inflationary expectations following the 25 basis points increase in the Bangko Sentral ng Pilipinas’ (BSP) key rates last week and the flat 6.7 percent inflation rate last October.
“It’s already trending downwards. We see that, more or less, inflation has already stabilized,” she told reporters after the auction.
De Leon said the additional increase in BSP rates last November 15, which brought the total increase this year to 175 basis points, gives investors’ confidence that inflation has somewhat reached its peak.
“So, investors see that we are able to already temper inflation with all these actions coming from the MB (Monetary Board) as well,” she said.
With the result of Monday’s auction, the National Treasurer expects a continued and steady rise in the interest rates of government securities.
On Tuesday, BTr is scheduled to auction PHP15 billion-worth of five-year Treasury bond (T-bond).
“Hopefully there would also be better appetite to really be moving into the intermediate part of the curve,” De Leon said.
Meanwhile, De Leon said they continue to monitor developments here and overseas, such as the trade tensions involving the US and several other countries, for the planned issuance of US dollar-denominated bond before the end of this year.
“We want to see first more stable environment for us to be able to come out and do the issuance. And, of course, we like to see more reasonable rates for the ROP (Republic of the Philippines bond),” she said.
Also, issuance of the planned Marawi bond, proceeds of which will be used to help finance the rehabilitation of Marawi City in Mindanao, depends on the discussions on the master plan for the war-ravaged area.
Issuance of another Retail Treasury Bond (RTB) is also not on the table “as of now,” she said, stressing that “at this point, we are fully well-funded already.”
“We are more or less comfortable right now with our cash build up that we’ve made during the past months in preparation for all our redemptions and to be able also to support all the requirements, including also a very comfortable buffer going into next year,” she said.
De Leon also confirmed that the Philippine government will “most likely” issue another renminbi-denominated Panda bond in the first half of 2019.
She said this plan is “part of the overall menu” in terms of the government’s funding program.
She said the planned issuance is “subject to good issue window for us.”
“But of course, we are doing preparations including discussions with Bank of China,” she added. (PNA)
