THE Bureau of the Treasury (BTr) has awarded the P15 billion on offer in its latest Treasury bills (T-bills) auction on Monday on the back of a very liquid domestic market as investors expect the Bangko Sentral ng Pilipinas (BSP) to relax tightening measures.
National Treasurer Rosalia V. de Leon said the auction committee saw rates for the government security within internal estimates.
“We see again, at least, the very good results of our auction today,” de Leon said. “We see also that rates have also continued to narrow given the expectation that BSP might take a pause.”
The 91-day tenor saw bids reaching P7.650 billion with the auction committee awarding the full P4 billion on offer at an average annual rate of 5.350 percent. This showed a contraction of 4.40 basis points compared to the previous auction rate of 5.394 percent.
“And also from the Fed [Federal Reserve system]; they are more dovish now and less hawkish given the results coming from the trade tensions and then of course the expectations that global growth would be slowing down,” de Leon said. “But, obviously, for the BSP, it’s really more that they would be taking a pause during their last policy meeting this Thursday.”
The BSP Monetary Board will be holding its last policy meeting for the year on December 13.
For the 181-day IOU, the auction committee awarded the T-bills with bids amounting to P8.525 billion at an average annual rate of 6.344 percent. This showed an expansion of about 3.90 basis points compared to the 6.305 percent set during the previous auction for the security.
De leon pointed out the tenor bucket was reduced to 181 days in view of the holidays in the next two weeks.
The auction committee decided to also award the P6 billion offer for the 364-day T-bill at an average annual rate of 6.585 percent with bids rising to P7.374 billion. This also posted an expansion of 7.80 percent compared to the previous rate of 6.507 percent.
Meanwhile, the Treasury decided to hold another auction for Treasury bonds (T-bond) on December 11 due to the “strong demand” from investors.
“We see the very strong demand; so it’s still early to close shop,” De Leon said. “So we added the seven year for tomorrow.”