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Investors still bet on T-bills as rates continue to drop

Bureau of Treasury building in Intramuros

The Bureau of the Treasury (BTr) once again upsized the volume of Treasury Bills (T-bills) it awarded on Monday to P24 billion as rates continued to drop across the board; the BTr pointing to monetary authority’s policy cut as impetus.

The auction was more than 5.8-times oversubscribed as total tenders reached P116.9 billion. This prompted the Treasury to double the accepted non-competitive bids for the 91-day and 182-day securities to P4 billion each.

With such move, the Treasury exceeded its initial P20-billion offering on Monday.  National Treasurer Rosalia V. De Leon still attributed the decline in the rates to the 50-basis point policy rate cut by Bangko Sentral ng Pilipinas Monetary Board and strong liquidity.

“We have 38.35 billion maturities back to the system,” De Leon said in a message to reporters.

Broken down, the Treasury raised P7 billion each from auctioning off 91-day and 182-day T-bills and P10 billion from the sale of 364-day T-bills.

All tenors also fetched lower average rates than the previous auction and the secondary market benchmark rates.

The 91-day T-bills capped at an average rate of 1.649 percent, dropping by 9.7 basis points from 1.746 percent in the previous auction. The security also attracted P32.657 billion; more than six times the initial P5-billion offering.

Meanwhile, the 182-day T-bills recorded a much lower average rate of 1.750 percent, plunging by 14.2 basis points from 1.892 percent previously. Tenders for the tenor amounted to 34.574 billion, also six times as much as the initial P5 billion offering.

Lastly, the 364-day T-bills had an average rate of 1.855 percent, crashing by 12.5 basis points from 1.980 percent previously. The tenor attracted P49.669-billion worth of bids, nearly five times the P10 billion offering.

For this month, the Treasury is set to borrow P205 billion from the local debt market, higher than the P170 billion programmed in June.

Bernadette D. Nicolas

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