The Bureau of the Treasury (BTr) has fully awarded P9 billion in its latest auction for Treasury bills (T-bills) on Tuesday, with market investors leaning toward shorter-dated securities.
National Treasurer Rosalia V. de Leon told financial reporters that the auction committee decided to fully award the 91-day IOU with P5 billion and the 182-day tenor bucket with P4 billion with bids for the government security being oversubscribed reaching a total of P25.578 billion.
“We see again the preference for the shorter-dated [securities], for the 91- and 182-day [tenor buckets]. The 364-day continues to be undersubscribed, but we also see that, more or less, rates have tempered,” de Leon said.
The tenders for the 91-day T-bill reached P15.086 billion with the auction committee rejecting P10.086 billion in the end. An average annual rate of 3.451 percent was set for the IOU, which saw an increase of 1.2 basis points from the previous auction rate of 3.439 percent. “We still see for the 364-day undersubscription given that they are leaning more toward the shorter-dated bills, for the investors, coming from the BSP [Bangko Sentral ng Pilipinas] action last Thursday. But still, rates continue to trend upward given the expectations from some that there will still be additional rate hikes coming from the BSP,” she added.
For the 182-day tenor, bids reached P10.492 billion with the auction committee rejecting P6.492 billion. The average annual rate for the security settled at 3.934 percent, which also saw an expansion of 2.4 basis points from the previous rate of 3.958 percent.
Bids for the 364-day T-bill were undersubscribed only amounting to P3.146 billion from the P6 billion on offer, with the auction committee awarding P2.236 billion. The average annual rate for the IOU was set capped at 4.226 percent seeing a 24 basis point increase from the previous rate of 3.986 percent.
Last week, the BSP had decided to raise benchmark interest rates by 25 basis points to 3.25 percent, to help address the rising prices of goods and commodities. The inflation rate recorded for April this year breached the target rate of the BSP of 2 to 4 percent settling at 4.5 percent for the month.
“So we are just seeing if we can have more lead time in terms of preparation for our funding for 2019, and if there will be good opportunities for us to be able to trigger a dollar or whatever funding approach structure that we could that we can also look into, then that would be something that we can take advantage of. Because we have already the budget for next year, we’ve already indicated that there will also be additional foreign financing based on the 75:25 [borrowing mix] we are looking at for 2019,” de Leon said.