MANILA – The rates of Philippines Treasury bills (T-bills) declined by as much as 10 basis points Monday, still on robust demand and rate hike expectations in the near term.
The average rate of the 91-day paper fell to 4.453 percent from week-ago’s 4.555 percent, the 182-day to 4.856 percent from 4.923 percent, and the 364-day to 5.050 percent from 5.069 percent.
National Treasurer Rosalia de Leon attributed this to the expected increase in domestic liquidity, given the next round of reserve requirement ratio (RRR) cuts scheduled on June 28, 2019, as well as the projected increase in the US Federal Reserve’s key policy rates in the coming months.
She said the Fed is not expected to hike key rates during its meeting this week but market players have priced in an increase in the next meeting or in July 30-31, 2019 due to the slowdown of the US economy and trade issues overseas.
The Bureau of the Treasury (BTr) offered the shortest T-bill tenor for PHP4 billion and banks submitted a total of PHP7.45 billion-worth of bids. The auction committee made a full award.
The six-month paper was fully awarded at PHP5 billion after tenders reached PHP17.88 billion.
The bids for the one-year paper amounted to PHP17.734 billion, nearly thrice the PHP6 billion offer. The auction committee made a full award.
Meanwhile, de Leon confirmed reports of lower borrowing program for the third quarter since the government remains liquid and because of the delay in the approval of this year’s national budget.
She, however, stressed that both the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) reported being on-track with their infrastructure spending programs, at PHP725 billion and PHP78 billion, respectively.
“We’re just in the second quarter and so far we are on track with the program borrowings,” she said but noted that this will be calibrated for the coming quarters vis-à-vis the recovery of government spending.
“But based on the report of the Public Works (DPWH) and the DOTr we see that we would be able to catch up,” she added. (PNA)
