INVESTORS are parking their funds in low-risk government securities amid uncertainties posed by coronavirus disease 2019 (Covid-19.)
The Bureau of the Treasury’s (BTr) Auction Committee on Monday fully awarded bids for the Treasury bills (T-bills) worth P20 billion on offer amid strong market demand.
The auction was nearly four times oversubscribed with total bids reaching P78.3 billion compared to the P20-billion offering.
All securities also fetched lower average auction rates than the previous auction and secondary market rates.
National Treasurer Rosalia V. de Leon told reporters they were “pleased” with the auction results.
De Leon said the rates have gone down across all tenors as a result of the lingering concern on the virus outbreak and over expectations of another rate cut by the Bangko Sentral ng Pilipinas (BSP) for the second quarter of the year.
“I think those are the expectations and we [are also seeing] the ‘flight to safety,’” de Leon said.
The 91-day T-bills worth P6 billion on offer were capped at an average auction rate of 3.072 percent, 4.3 basis points down than the previous auction rate of 3.115 percent. Total bids for the security amounted to P21.798 billion.
As for the 182-day T-bills, the average auction rate settled at 3.420 percent, a decrease of 4.1 basis points from the previous auction rate of 3.461 percent.
A total of P20.792 billion was tendered for the security.
Meanwhile, the 364-day T-bills worth P8 billion on offer posted an average auction rate of P3.836 percent. This is 7.2 basis points below 3.908 percent recorded in the previous auction. Tenders for this tenor reached P35.755 billion.
On top of Monday’s auction results, de Leon also disclosed the BTr’s plan to open the tap and OTC facilities for one-year T-bills worth P8 billion amid strong demand.
As for the other offshore bond issuances, de Leon said they are still monitoring the market for the dollar-denominated bond issuance but given the lingering concern on the virus outbreak, she said “it is still very tepid for the moment in terms of other issuances also.”
De Leon said fiscal authorities are still monitoring the situation and hinted at acting on other issuances on reduced concerns on Covid-19 “and we see that there is [lesser] risk sentiment [in the] market.”