YIELD of the benchmark Treasury Bills reached another all-time low during Monday’s auction at the Bureau of the Treasury after investors demanded for more investment outlet due to the large amount of maturing government securities this week.
During Monday’s auction, the government was able to raise P9.6 billion, higher by P600 million from its original offering of P9 billion. Aside from the amount raised, the government is also opening its over the counter facility, wherein the investors can buy up to P9 billion more of the government securities for all tenors.
The tap facility would be open until today (Tuesday) at 5 p.m. to sell another P9 billion, which will be distributed proportionately to the original issue sizes of 91-day, 182-day and the 364-day debt papers.
“Such amount is what we are allowed under the auction rule,” deputy treasurer Eduardo Mendiola said after the auction.
Rate of the 91-day T-bills, the benchmark of banks when pricing their loans, reached an all-time low of 0.68 percent from the previous rate of 0.9 percent.
The government awarded P2.1 billion, instead of the P1.5 billion original offering.
At the secondary market, the said debt paper was at 0.85 percent or 17 basis points higher.
Volume for the said tenor swelled to P7.58 billion, or over three times oversubscribed than the original issue size of the government.
The second lowest rate that was recorded for 91-day T-Bills was recorded on January 10 when the interest rate reached 0.7 percent.
Meanwhile, the rate for the six-month debt paper reached .898 percent, or some 30.7 basis points lower than the previous auction rate at 1.205 percent.
The said paper was trading at the secondary market at .91 percent or a mere 2 basis points higher.
Volume for the 182-day paper was more than three times oversubscribed to P11.86 billion. The government made a full award of P3.5 billion.
It was the same story for the one-year paper after it reached a rate of 1.968 percent, or 22.3 basis points lower than the previous rate of 2.191 percent.
Tenders reached P11.5 billion, but the government made a full award of P4 billion.
At the secondary market, the done deal for the one year paper was at 2 percent, which is 14 basis points higher than the said rate.
According to Mendiola, the maturing T-bills for the week of P26 billion will flood the market of excess cash and the holder of these security papers only want to park their money to the government securities such as the T-bills and Treasury Bonds.
