THE auction for Treasury bills (T-bills) on Monday received mixed results as the Bureau of the Treasury (BTr) was only able to award P11.075 billion of the P15-billion offering, as demand for the government paper settled on the shorter-dated security.
Deputy Treasurer Erwin D. Sta. Ana told reporters the auction committee decided to cap the rates for the 182- and 364- day T-bill, as bids for the tenor buckets barely covered the offer size.
“The demand actually came in at the 91-day, and the tenders just barely covered the offer sizes for the 182- and 364-day T-bill. So the decision of the committee was to cut it, cut the auction for the latter two tenors at the rate where the market came in more,” Sta. Ana said.
Bids for the 91-day T-bill amounted to P9.601 billion, which prompted the auction committee to award the P4 billion on offer.
The average annual rate for the security was at 5.612 percent, a contraction of 2.3 basis points from the previous rate of 5.635 percent.
He explained that investor demand for the 182- and 364-day T-bill may be muted, as the working week will be cut short in line with the Holy Week break next week.
“Looks like it could be that the participants are weighing in some of the possible policy movements in the next quarters. Of course, given the several pronouncements already of the BSP [Bangko Sentral ng Pilipinas], but we think that somehow demand is muted on the 182- and 364-day because partly of the holidays. There’s muted trading in the past days because of the short working week this week and next week, so banks also would need certain liquidity to service off client requirements so it could also somehow explain that,” he added.
The 182-day T-bill was partially awarded P2.760 billion from the P5 billion on offer, with bids for the security amounting to P5.340 billion.
The average annual rate was capped at 5.982 percent, an increase of 2.4 basis points from 5.958 percent.
Bids for the 364-day tenor were undersubscribed at P5.915 billion from the P6-billion offering, with the auction committee partially awarding P4.315 billion in the end.
The average annual rate for the security was capped at 6.052 percent, increasing by 9.1 basis points from the previous rate of 5.961 percent.
For this year, the national government has programmed its gross borrowings for both domestic and foreign IOUs at P1.19 trillion, which is higher by 20.7 percent from the 2018 level of P986 billion.