The Bureau of the Treasury (BTr) has awarded P12.983 billion on offer in latest Treasury bills (T-bills) auction amid low rates on the back of strong liquidity in the market.
The BTr said the auction was oversubscribed with total bids reaching P35.1 billion, more than twice the offering. National Treasurer Rosalia V. de Leon told reporters after the auction on Monday that rates have gone down, especially in light of pronouncements from the Central Bank that the Monetary Board would cut interest rates and the reserve requirement ratio (RRR) sometime in the fourth quarter.
“We also saw that, in terms of rates, they’re even lower than the current secondaries, except [in the] one year. That’s why we also made a partial award. We don’t want that it would also trend higher than the secondary [market],” de Leon said. Secondaries refer to the buying and selling of preexisting investor commitments to a new buyer.
“Of course, given the two tenors, they are all going down following the pronouncements of [Bangko Sentral ng Pilipinas, or BSP] Governor [Benjamin E.] Diokno that there is also room for the Monetary Board to cut policy rates and also even the RRR,” she added.
She also quoted Diokno as saying monetary authorities will be monitoring developments related to the recent attack on the oil fields of Saudi Arabia and its impact on prices. While the government of Saudi Arabia has made pronouncements that they are already trying to restore oil production levels to normal, these developments, according to de Leon, will likely be included in the discussions at the monetary policy meeting next week.
“The Governor has already made a forward guidance of the direction for policy rates and also in terms of additional liquidity that will be flushed into the system if ever they cut the RRR again sometime during the fourth quarter,” the National Treasurer said. “And, of course, we have a maturity. We have a redemption of about, I think, P12 billion. So that’s additional liquidity flow into the system.”
The 91-day and 182-day T-bills fetched averages of 3.07 percent and 3.42 percent, lower than previous auctions and prevailing market rates. The 364-day T-bills capped at an average of 3.666 percent.
The 91-day T-bills was awarded P4 billion, with bids amounting to P11.9 billion. Total rejected bids reached P7.9 billion.
The 182-day T-bill was awarded P5 billion, with bids amounting to P12.75 billion. Total rejected bids reached P7.75 billion
The 365-day T-bill was awarded P3.983 billion, with bids amounting to P10.403 billion. Total rejected bids reached P6.42 billion. The BSP earlier moved to ease its monetary-policy stance with a main policy rate cut, as gross domestic product registered a slower growth in the first half of the year and as inflation rate for July remained tepid.
The Monetary Board recently decided to cut the interest rate on the BSP’s overnight reverse repurchase facility by 25 basis points to 4.25 percent.
Further, the interest rates on the overnight deposit and lending facilities were reduced to 3.75 percent and 4.75 percent, respectively.