The Bureau of the Treasury (BTr) raised another P20 billion in Treasury Bills (T-bills) on Monday as investors continue to park their funds on government securities even after the record sale of P516.3-billion five-year Retail Treasury Bonds (RTBs).
The auction was oversubscribed with total bids, reaching P60.2 billion, more than thrice the P20 billion-offer.
Rates across all tenors were also lower than the previous auction as well as secondary market benchmark rates.
Following the auction, National Treasurer Rosalia V. De Leon told reporters there is “continued strong buying interest on [the] front-end of curve at lower rates amidst RTB record issuance.”
De Leon said they also decided to offer another P5 billion in 364-day T-bills through the tap facility auction for all 11 government securities eligible dealers-market makers.
This after strong demand for the tenor was seen as it attracted tenders of as much as P26.285 billion, more than twice the P10-billion offer.
The security also fetched an average rate of 1.746 percent, slipping by 0.3 basis points from the previous average rate of 1.749 percent.
Meanwhile, total bids for the 182-day T-bills reached P17.078 billion, more than three times the P5-billion offering.
Its average rate slid to 1.386 percent, a 6.8 basis-point drop from 1.454 percent previously.
Lastly, the tenders for the 91-day T-bills amounted to P16.935 billion, three times as much as the P5-billion offer.
The tenor’s average rate settled at 1.113 percent, plunging by 10.8 basis points from 1.221 percent in the previous auction.
For this month, the Treasury is set to borrow P170 billion from the local debt market.
Last Friday, the Treasury closed the 3-week offer period for its 24th RTB issuance that started on July 16.
De Leon said strong market liquidity conditions propelled the healthy demand for the RTBs during lockdown measures against the Covid-19 pandemic.
Of the P516.3 billion, P488.5 billion in new money was raised while the remaining P27.8 billion was raised from the switch tender offer.
Proceeds from the RTB issuance will be used by the government for its budgetary support.
Aside from strong market liquidity conditions, the Treasury said the Bonds.PH mobile application (app) also enabled the success of the RTB issuance.
The app reached almost 25,000 downloads from 85 countries and around 80 percent of more than 2,500 transactions through the app are P10,000 and below.
“Market liquidity, great timing and our attractive interest rate were the drivers of success for this year’s offering of RTBs. As our economy expands and more people become financially capable to save, it is rewarding for the BTr to see a wider set of the public put their trust in our almost annual fund-raising exercise,” De Leon said.
To note, the economy contracted in the second quarter and brought it to a technical recession.
RTBs are generally considered low risk for investors as these allow them to earn on a fixed interest based on prevailing market rates.