BTr makes full award of T-bills

THE GOVERNMENT raised P20 billion in fresh funds from Treasury bills (T-bill) yesterday, with rates sliding across all tenors as investors priced in recent pronouncements from the local and US central banks.

The Bureau of the Treasury (BTr) made a full award at its T-bills auction on Monday as tenders from investors reached P31.771 billion, well above the amount it wanted to raise. However, it was slightly lower than the P31.802 billion in tenders received a week ago.

Broken down, the Treasury accepted P6 billion as planned for the 90-day papers out of the P6.745 billion in offers from banks and other financial institutions. The average rate declined by 1.7 basis points (bp) to 5.716% from the 5.733% quoted in the previous offer. Last week, the BTr opted to reject all bids for the three-month tenor.

The government also made a full award of the 182-day debt notes it placed on the auction block, borrowing P6 billion as planned versus tenders amounting to P11.945 billion. The average yield slipped 3.9 bps to 5.936% from last week’s 5.975%.

The BTr likewise fully awarded the 364-day T-bills, accepting P8 billion out of bids totalling P13.081 billion. Its average yield also slid by 3.4 bps to 6.018% from the 6.052% tallied in the previous successful auction, as the government also rejected all bids for the one-year papers last week.

At the secondary market on Monday, the three-month, sixmonth and one-year papers were quoted at 5.488%, 5.878% and 6.044%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates.

Following the auction, National Treasurer Rosalia V. De Leon said rates went down as market participants priced in “what they heard from the Governor saying that there’s now room for monetary easing,” referring to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.

On Friday, Mr. Diokno said the central bank can now consider cuts in policy rates.

“Given the decelerating inflation in the Philippines, there’s an opportunity for monetary easing but as I’ve said, that would be dependent on the data that will be given to us by our technical staff,” Mr. Diokno said last week.

Benchmark interest rates currently range from 4.25-5.25%, reflecting the cumulative 175 bps increase in policy settings last year meant to arrest rising inflation expectations.

Inflation came in at 3.8% in February, easing for the fourth straight month due to milder price increases in food and nonalcoholic beverages, and landing within the 2-4% target band of the government until 2022.