THE Bureau of the Treasury (BTr) received mixed results in its latest auction for Treasury bills (T-bills) on Monday, awarding P13.24 billion from the P15 billion on offer, as investors flocked to shorter-dated tenor buckets.
National Treasurer Rosalia V. de Leon told financial reporters that investors in government securities prefer shorter-dated IOUs, as shown in the latest auction for T-bills, where most bids concentrated on the 91 and 182 day tenor buckets.
“Except for the 364 day, all the rates trended downward. Again, we see here the appetite continues to be on the short-end on the 91 and 182 day, because [it’s] coming out of the consensus of inflation of 4.9 percent and, of course, the BSP’s [Bangko Sentral ng Pilipinas] own estimate of about 4.6 percent to 5.4 percent for May,” de Leon said.
Bids for the 91-day IOU reached P12.246 billion, prompting the auction committee to award the full P5 billion on offer at an average annual rate of 3.296 percent. This represented a 0.4 basis point decrease compared to the rate of 3.300-percent set during the previous auction.
For the 182-day tenor, the auction committee awarded the full P4 billion on offer with bids for the T-bill reaching P10.576 billion. The average annual rate for the government security settled at 3.677 percent, lower by 2.300 basis points from the previous auction’s 3.700 percent.
Factors such as the country’s inflation level for May and possible rate hikes from the Federal Reserve System (the Fed) in June were pointed to as those figuring in the market investors’ consideration.
“Also, data from the US [United States] [said] the lowest jobless report in 18 years is at 3.8 percent [for May] so [there’s] near certainty that the Fed again will hike in June. All those contributed for investors to be inclined toward the short end,” she added.
Last week the US Labor Department released its jobs report for May, showing the country’s unemployment dropped to 3.8 percent, its lowest figure in 18 years.
364-day tenor
For the 364-day tenor, the auction committee decided to partially award P4.239 billion from the P6 billion on offer, at an average annual rate of 4.246 percent. This posted an increase of 4.80 basis points compared to the previous auction’s 4.198 percent.
Total tenders for the T-bills auction reached P29.67 billion, almost twice oversubscribed from the P15 billion on offer. The auction committee raised a total of P13.24 billion from the auction for T-bills on Monday.