SOME of the funds effectively excluded from the special deposit mechanisms created by the Bangko Sentral ng Pilipinas (BSP) found their way to the Bureau of the Treasury (BTr), allowing officials to award in full P15 billion worth of Treasury bills, or T-bills, on Monday.
The repurposed funds pertain to those locked out of the BSP’s 28-day term deposit window whose volume was cut to only P110 billion, from P140 billion originally.
According to National Treasurer Rosalia V. de Leon, the auction committee enjoyed the obviously enhanced liquid tone of the investing market as a result of the reduction of the 28-day term deposit facility of the BSP.
“We see the very liquid tone of the market given that first, the BSP reduced the 28-day facility offer from P140 billion to P110 billion so that’s P30 billion released [as additional] liquidity,” de Leon told financial reporters.
The 91-day tenor was almost three times oversubscribed, with tenders reaching P29.429 billion.
The BTr committee sold the full P6 billion on offer and rejected P23.429 billion.
The three-month tenor posted an average rate of 2.088 percent, which was 5.5 basis points lower than the 2.143 percent set at the previous auction.
“Then at the same time, we’ve seen that for all three bucket tenors the rates have gone down, given that first, we have very soft data coming out of the US so [that] expectations have been muted in terms of another rate hike in December,” de Leon said.
The 182-day tenor was similarly sold in full at P5 billion, with tenders reaching P11.035 billion.
The auction committee rejected P6.035 billion. Six-month T-bills now average 2.564 percent, or a decline by 2.8 basis points compared to 2.592 percent at the previous auction.
“Then, of course, the impact of hurricane Irma, [US] growth prospects have slightly moderated. We hear a lot of talk coming out of the Federal Reserve about how they have to be cautious [on] inflation. Again the necessity of another rate hike may not be there,” she said.
The 364-day tenor bucket was similarly sold in full at P4 billion, with tenders reaching P11.790 billion.
The committee rejected P7.790 billion and one-year T-bills now average 2.920 percent, or lower by 1.5 basis points from 2.935 percent set at the previous auction.
“We see also that inflation in the domestic market is still within the central bank [target] of 2 percent to 4 percent. I think it’s really liquidity being released from the TDF,” she said.