THE Bureau of the Treasury (BTr) fully awarded a total of P15 billion in Treasury bills (T-bills) on Monday, with investors seen to flock to shorter-dated securities.
Deputy Treasurer Erwin D. Sta. Ana told financial reporters that market investors are seen to be taking a cautious stance at the moment, parking bids at shorter-dated securities, while waiting for reports on the country’s gross domestic product (GDP), inflation print, as well as further policy action from the Monetary Board or the Bangko Sentral ng Pilipinas (BSP).
“Obviously, full award for all the tenors, and this week is actually a big data week. As you know inflation, GDP, plus the Monetary Board policy meeting, and it just goes to show that players are really playing it safe and taking a cautious stance at this stage. Hence, the more than three times oversubscription in the auction,” Sta. Ana said.
The auction committee fully awarded the P4 billion for the 91-day T-bill with bids reaching P11.355 billion. The average annual rate for the IOU settled at 3.290 percent, increasing by 2.9 basis points coming from the average annual rate of 3.261 percent in the previous auction.
The 182-day tenor was awarded P5 billion with bids reaching P17.316 billion. The rate for the security settled at 4.186 percent, contracting by 10.8 basis points compared to the previous auction rate of 4.294 percent.
Bids for the 364-day T-bill reached P17.712 billion, prompting the auction committee to award the full P6 billion on offer. The average annual rate for the security was 4.899 percent, decreasing by 0.1 basis point from the previous rate of 4.900 percent.
“You can also see that in the secondaries, substantial part of secondary market trade at least for last week, are in the short end,” he added.
Total tenders for the T-bills reached P46.4 billion, more than three times the P15 billion on offer.
Meanwhile, Sta. Ana also pointed out that the samurai bond issuance of the country is well within on track, eyeing the issuance within this month.
“We’re on schedule; the only thing that could probably stop us from going out is a drastic change in market conditions in the samurai market. We are on track, I mean the August timetable is still there,” he said.
The tenor and the volume for the issuance have yet to be released by the BTr but is seen to be reported within the coming weeks.
“None as of yet, but there will be an announcement soon on the final tenors that will be issued and also the volume. We expect that maybe within the week or next,” he added.
The BTr earlier explained that the government is looking to float samurai bonds under mixed tenors, looking at the three-, five-, seven- and 10-year tenor buckets, with the final mix depending on market appetite and pricing levels.
In June this year, Finance Secretary Carlos G. Dominguez III confirmed that the Philippines plans to issue around $1-billion samurai bonds this year, following its two successful floats of dollar- and renminbi-denominated securities in the offshore markets in the first quarter of 2018.
The Philippines last sold samurai bonds in 2010, worth $2.5 billion, this allowed the government to complete its commercial funding exercise that year.