T-bills partially awarded

THE GOVERNMENT opted for a partial award of the P15 billion worth of Treasury bills (T-bills) it offered yesterday, taking advantage of strong demand that drove yields lower for shorter-termed papers.

Offers received during Monday’s auction amounted to P38.856 billion, surging from the P28.724-billion bids seen a week ago and nearly double the figure which the Bureau of the Treasury planned to raise. This allowed the government to award P12.966 billion worth of T-bills.

All three tenors were oversubscribed, although bulk of the demand still went towards the shorter end.

The Treasury awarded P5 billion worth of 91-day T-bills as market players betted as much as P16.01 billion. This drove the average rate down to 3.437%, some 1.4 basis points ( bps) lower from the 3.451% fetched a week ago.

Bids for the 182-day papers also received overwhelming tenders reaching P14.06 billion, which allowed the government to raise P4 billion for its weekly program. Rates saw an even bigger move as it dropped to 3.879%, 5.5 bps lower than the 3.934% average yield during last week’s auction.

Demand for the 364-day tenor also recovered this week to reach P8.786 billion, well above the P6 billion which the state wanted to raise. However, the Treasury rejected some bids due to high margins sought by banks and accepted only P3.966 billion.

Yields averaged 4.297%, slightly higher than the 4.226% fetched a week ago as rates were capped at 4.325%.

Three- month and six- month papers were quoted at 3.4405% and 3.9088% at the secondary market before the Treasury’s T- bills auction, while one-year notes fetched a 4.6536% yield.

At the close of trading, the 91day and 182-day papers’ rate rose to 3.4565% and 3.911%, respectively, while the 364- day T- bills fetched 4.1441%

National Treasurer Rosalia V. de Leon said yesterday’s auction came out as expected, which she described as a “very healthy” turnout.

“We see that there is also liquidity now following after last week’s partial award also, we see the trading appetite also. There’s now a supply for the one-year (papers),” Ms. De Leon told reporters after the auction.

“I think the preference will continue to be on the shorter-dated tenors given that first, they still see the robust possibility for a Fed rate hike and