The Bureau of the Treasury (BTr) raised a total of P22.405 billion from its auction on Monday, as investors lapped up Treasury bills (T-bills) with longer tenors.
National Treasurer Rosalia V. de Leon told reporters that the auction committee saw strong appetite from investors especially for longer-dated securities, as shown in the tenders for the 364-day T-bill amounting to as much as P43.724 billion.
“There’s demand, there’s liquidity in the sense that it’s after Christmas break. And then you’re also seeing strong [investment inflows] and the strengthening of the peso,” de Leon said.
Strong market demand prompted the auction committee to award a total of P22.405 billion during the auction despite partially awarding the benchmark 91-day T-bill with P5.205 billion, from the P6 billion on offer.
Bids for the 91-day tenor bucket were also undersubscribed at P5.955 billion. With the award of P5.205 billion, the average annual rate for the IOU settled at 5.396 percent, 1.50 basis points lower than the 5.411-percent cap in the previous auction.
Tenders for the 364-day T-bill amounted to P43.724 billion. The auction committee awarded P11.2 billion, more than the P8 billion on offer. The average annual rate was set at 6.253 percent, 38.80 basis lower than the 6.64- percent rate in the previous auction.
“We can double the amount for the noncompetitive [bids] [which is under] Department Order 141, in line with the regulations on the auctions,” de Leon said.
The BTr also awarded the full P6 billion on offer for the 182-day tenor. Bids for the security amounted to P17.260 billion. The average annual rate settled at 6.154 percent, 27 basis points lower than the 6.424 percent recorded in the previous auction.
On Monday, the BTr also decided to open its tap facility for the 364-day T-bill offering another P8 billion and opened its over-the-counter (OTC) window to auction of all tenors of the T-bills for government-owned and -controlled corporations (GOCCs) and tax exempt institutions (TEIs).
GOCCs and TEIs can submit their orders through government financial institutions for the three T-bill tenor buckets.
“[We will open the OTC] and at the same time the tap for the one year. Maybe we’ll just make it regular because that’s really the window for the TEIs so they could participate. Otherwise, there’s no incentive because they are tax exempt, if they don’t bid on the primary [market] then they would have to pay the tax because the T-bills are already front loaded,” she said.
The BTr’s 10 government securities eligible dealers (GSEDs) market makers can avail of the 364-day T-bill under the tap facility.