THE Bureau of the Treasury (BTr) reported mixed results in its Treasury bills (T-bills) sale on Monday when it awarded only P9 billion of the P15 billion on offer given the reduced offering on the term-deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) to P60 billion.
National Treasurer Rosalia V. de Leon said the auction committee awarded in full the 91- and 182-day buckets since these were where the bids were thickest. The BTr rejected all bids for the 364-day tenor as bids for the government security went as high as 4.338 percent.
“A lot of the bids flocked to the shortest end of the curve, the 91 and 182 day, because [of the] reduction on the TDF volume to P60 billion. This shows preference for the short end. The banks are also waiting for the results of the MB [Monetary Board] policy rate discussions on Thursday and the release of the GDP data,” de Leon told financial reporters.
Last week the BSP reduced the volume offered on its TDF to P60 billion from P110 billion, pointing out that investors are expected to hold on to their cash for the coming barangay elections on May 14.
The seven-day TDF sale was reduced to P30 billion, from the previous P40 billion, and only P20 billion for the 14-day TDF from the previous P30 billion and P10 billion for the 28-day TDF from the previous P20 billion.
“The preference continues to be [on the short end] because of the uncertainties on inflation. They see inflationary expectations are also building up so everything, hopefully, will have a calming effect on what would really be the action of the MB on Thursday,” de Leon said.
Had the auction committee accepted all bids for the 364-day tenor of only P4.580 billion when the full offer was P6 billion, the one-year rate would have increased by 35.2 basis points from the previous rate of 3.986 percent.
“[The 364-day] rate is at 4.25 [percent]. That’s already the rate of our retail Treasury bond with a tenor of three years so it’s like they are bidding for the bond. I think the banks are really testing the tolerance level of the Treasury. It’s not something that we will easily accept because they also see our liquidity position. They should know by now also. And besides, you saw the revenue collection of the BIR [Bureau of Internal Revenue] and the BOC [Bureau of Customs] that is also adding to the buffer of the Treasury,” she said.