AFTER monetary authorities’ confidence-building move amid economic headwinds, the Bureau of the Treasury (BTr) fully awarded P20 billion worth of Treasury bills (T-bills), with all tenors fetching lower average auction rates than the previous auction and secondary market rates.
Deputy Treasurer Erwin Sta. Ana told reporters on Monday that aside from the rate cut last week, the lower average auction rates were driven by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno’s announcement of a further cut in the middle of the year. But Sta. Ana said these were expected.
In a paper, JP Morgan’s Asia Pacific Economic Research unit said it is also “penciling in” “additional monetary-policy easing” in the Philippines by 25 basis points in the first half of the year. This, the unit said, follows the monetary easing in China and Thailand on the heels of the 2019 novel coronavirus outbreak.
Sta. Ana said that the reduction in rates was also prompted with a “quite manageable” inflation.
The auction was oversubscribed with total bids reaching P56.3 billion, nearly thrice the P20 billion on offer.
The average auction rate for the 91-day T-bills worth P6 billion on offer was capped at 3.115 percent.
This is 7.2 basis points lower than the previous average auction rate at 3.187 percent.
The 182-day T-bills also worth P6 billion on offer fetched a lower average auction rate at 3.461 percent. This is down by 6.2 basis points from 3.523 percent previously.
Meanwhile, the 364-day T-bills worth P8 billion on offer were also sold at an average auction rate of 3.908 percent, which is 5.6 basis points below the previously recorded average auction rate at 3.964 percent.
Last week, the BTr was able to raise a record-high amount of P310.8 billion from its biggest Retail Treasury Bond (RTB) issuance so far.
Broken down, P250 billion was raised through new money and P60.8 billion was raised through the switch tender offer.
The latest RTB issuance surpassed the P255.4 billion sold in 2017.
It is also BTr’s first RTB issuance for the year and the government’s 23rd tranche.
Meanwhile, Sta. Ana said government’s financial managers are still monitoring the market on the timing of a dollar-denominated bonds issue.
“We will also check our cash buffer; that’s also a consideration,” he added.