Treasury bills rates expected to move sideways

YIELDS ON Treasury bills (Tbills) on offer today are seen to move sideways, after the government’s offering of retail bonds attracted strong demand last week.

The Bureau of the Treasury (BTr) is offering P15 billion worth of T- bills at its auction today. Broken down, the Treasury will raise P5 billion and P4 billion via three- and six-month papers, respectively, and another P6 billion from the one-year debt papers.

Traders interviewed on Friday that yields on the debt papers on offer will likely move sideways, with one saying it will move by around five basis points from the previous auction results.

Last Monday, the government partially awarded the T- bills it placed on the auction block, raising P13.24 billion out of the P15 billion it wanted to borrow.

Broken down, the average rate on the 91-day securities slipped by four basis points to 3.296% from the 3.3% booked in the previous auction, while the yield on the 182-day T-bills also declined by 23 basis points to 3.677%.

The 364- day papers also fetched lower yield of 4.246%, 48 basis points lower than the 4.198% logged in the previous auction.

At the secondary market on Friday, the three- and six-month debt notes fetched 3.268% and 3.6216%, respectively, while the one-year papers were quoted at 4.1787%.

“For the T- bills on offer [ on Monday], we’re looking at sideways movement because it is in time with the settlement of the RTBs ( retail Treasury bonds),” the trader said in a phone interview Friday.

The government offered the 21st tranche of RTBs for minimum denominations of P5,000 from May 30 until June 8 to encourage the public to invest and save. The bonds carry a 4.875% coupon.

During the rate- setting auction, BTr raised P66 billion against total tenders of P92.8 billion from banks and other financial institutions.

The bonds, which will be issued on June 13, will mature in 2021.

“[The T-bills auction] is in time with the RTB settlement so that means more supply of bonds,” the trader added.

She also noted that the market is looking at the policy meeting of the US Federal Reserve (Fed) this week.