The Bureau of the Treasury (BTr) made a partial award of the P20-billion Treasury bills (T-bills) offered on auction on Monday, as rates rose across all tenors.
The BTr awarded the full P9-billion 91-day T-bills on offer, but partially awarded P3.584 billion for the 182-day security and P3.779 billion for the 364-day tenor.
National Treasurer Rosalia V. de Leon said investors’ preference remained with the almost twice-oversubscribed shorter dated government securities.
“You see oversubscription for the 91 day, but there is still demand for the 182 day and the one year [tenor]. But we see that rates, compared to previous auctions, the bids are really over the roof,” de Leon told financial reporters.
The 91-day security received bids amounting to P16.120 billion with the tenor receiving an annual average rate of 2.995 percent, 2.90 basis points lower than the 3.024-percent rate set in the previous auction.
The 182-day security was undersubscribed as it received bids amounting to P5.834 billion from the P6 billion on offer. The auction committee partially awarded P3.584 billion for the tenor with an annual average rate of 3.206 percent, showing a 4.10 basis point increase, from the 3.165 percent set in the previous auction.
“Maybe the market is continuing to digest about the inflation path, as already conveyed by the BSP [Bangko Sentral ng Pilipinas], that in 2019 they will again tread back to the target of 2 percent to 4 percent, what we are having right now is transitory,” she added.
The 364-day tenor was also undersubscribed, with bids amounting to P4.979 billion from the P5 billion on offer. The BTr partially awarded P3.779 billion with an annual average rate of 3.434 percent, which is 12.30 basis points higher than the 3.311 percent set in the
previous auction.
For the P20-billion T-bills offered, the BTr auction committee received bids amounting to P26.93 billion. In the end, it awarded a total of P16.36 billion.
“The Monetary Board also decided for a stay in policy rates, so they don’t see really any inflationary expectations rising, so the setting continuous to be appropriate. I think that is also being digested by the market,” de Leon said.
Meanwhile, de Leon expressed optimism for the country’s Panda bonds. “We are happy because of the overwhelming reception considering it’s our maiden issuance and the thing here is there is a huge offshore demand due to the bond connect. And we’ve seen about 88 percent of the book is from offshore, even on the part of the Chinese, the PBOC [People’s Bank of China] and those other regulators, they were also pleasantly surprised that there was a huge demand in our issue,” she said.
Last week the Philippines issued Panda bonds worth 1.46 billion in renminbi (RMB) with a three-year tenor. The security fetched a coupon rate of 5 percent, a tight spread of 35 basis points above benchmark.
The Philippine government’s inaugural issue of renminbi-denominated bonds received oversubscription with bids reaching RMB 9.22 billion, compared with the government’s debt offering of RMB 1.46 billion.