Gov’t fully awards T-bill offering
THE GOVERNMENT made a full award of the Treasury bills (Tbill) it auctioned off on Monday as rates on the longer tenors slipped.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at its T-bills auction yesterday. The offer was more than thrice oversubscribed, with total tenders totalling P46.4 billion, climbing from the P35.8 billion recorded at last week’s offering.
Broken down, the government borrowed P4 billion as planned via the 91-day tenor yesterday as bids by investors amounted to P11.355 billion. The average rate rose 2.9 basis points (bp) to 3.29% from the 3.261% logged in the previous auction.
The Treasury also made a full award of the 182-day papers as it accepted P5 billion as planned out of offers totalling P17.316 billion. Strong demand caused the average yield to decline by 10.8 bps to 4.186% from last week’s 4.294%.
For the 364-day T-bills, the BTr borrowed the programmed P6 billion out of the P17.712 billion tendered by banks and other financial institutions. The average rate likewise slid a tad by 0.1 bp to 4.899% from the 4.9% tallied in the previous offering.
At the secondary market prior to the auction, three-month and six-month papers were quoted at 3.6594% and 4.2217%, respectively, while one-year securities fetched a 4.8241% yield.
At the close of the trade, the 91day and 182-day papers rallied to fetch lower rates of 3.2201% and 4.2148%, respectively, while the 364-day T-bill fetched 4.8553%.
Deputy Treasurer Erwin D. Sta. Ana said the Treasury made a full award of the T-bills on offer as tenders from market players climbed ahead of a slew of economic data to be released this week.
“Obviously, [we opted for a] full award for all the tenors. This week is actually a big data week as you inflation, [gross domestic product growth], plus the Monetary Board policy meeting [will be out this week],” Mr. Sta. Ana told reporters shortly after the auction.
The Bangko Sentral ng Pilipinas (BSP) is widely expected to raise interest rates anew this week as inflation might have spiked further last month, according to economists in a BusinessWorld poll conducted last week.
A poll of 14 analysts yielded a 5.5% median estimate for headline inflation in July, which if realized will climb from the 5.2% print last June and fall in the middle of the BSP’s 5.1-5.8% estimate range.
Meanwhile, six of the analysts polled said a 50-bp hike would be announced by the Monetary Board on Thursday, while the rest see a 25-bp increase on the table.
“It just goes to show that players are really playing it safe and taking a cautious stance at this stage hence the more than three times oversubscription in the auction,” Mr. Sta. Ana said, adding that a substantial part of secondary market trades last week were skewed towards the short end of the curve.
Meanwhile, a bond trader said the “sideways movement” of the rates was expected.
“Although, the 182-day papers slid from the previous auction. We saw some market bias for the 182- and 364-day T-bills,” the trader said in a phone interview yesterday. “The rates of the sixmonth and one-year bills are high already so it’s attractive for investors.”
The Treasury plans to raise P300 billion from the domestic market this quarter through auctions of securities, offering P195 billion in T-bills and another P105 billion in Treasury bonds. •