MANILA – Demand for Philippine government-issued Treasury bills (T-bills) was strong Monday on expectations for further hikes in the central bank’s key rates resulting in full awards for all tenors and opening of the tap facility.
The Bureau of the Treasury (BTr) offered the 91-day paper for PHP10 billion and tenders reached PHP15.48 billion.
The auction committee made a full award even if its interest rate posted an uptick to 3.471 percent from 3.413 percent during the auction last April 6.
Bids for the 182-day T-bill totaled to PHP16.193 billion, more than thrice the PHP5-billion offer.
Average rate of this tenor slid to 3.409 percent from 3.553 percent in the previous auction.
The 364-day paper attracted PHP18.976 billion worth of tenders, more than three times the PHP5-billion offer.
Its interest rate averaged at 3.685 percent, lower than the previous auction’s 3.845 percent.
National Treasurer Rosalia de Leon attributed the strong demand for the debt papers partly to the decline in the interest rates.
In a Viber message to journalists after the auction, de Leon said they still fully awarded the shortest tenor T-bill because its rate is still within their expectations.
She said there were huge tenders because of “strong liquidity onshore”, citing the maturing debt papers amounting to PHP120 billion.
De Leon said investors are also anticipating another cut in banks’ reserve requirement ratio (RRR) following the statement of Bangko Sentral ng Pilipinas’ (BSP) Governor Benjamin Diokno about the need for bolder measures to address the economic impact of the coronavirus disease 2019 (Covid-19).
“Investors (are) also now pricing in another policy rate cut as Gov(ernor) has likewise conveyed,” she said.
Aside from the sale during the auction, BTr executives also opened the tap facility to accommodate the strong demand for the six-month and one-year papers.
During the tap facility auction, investors submitted PHP855 million worth of bids for the six-month paper, lower than the PHP5-billion offer. The auction committee accepted all the bids for this tenor.
The 364-day paper was also offered for PHP5 billion and was fully awarded after bids reached PHP6.190 billion. (PNA)
