T-bills fetch lower yields

The Philippine Star - - BUSINESS - – Mary Grace Padin

Short-term gov­ern­ment se­cu­ri­ties yes­ter­day fetched lower yields across­the-board amid ro­bust liq­uid­ity in the fi­nan­cial sys­tem, the peso’s ap­pre­ci­a­tion, as well as lower in­fla­tion­ary ex­pec­ta­tions from the mar­ket, the Bureau of the Trea­sury (BTr) said yes­ter­day.

Dur­ing yes­ter­day’s auc­tion, rates for the 91-day Trea­sury bills (T-bills) av­er­aged 5.396 per­cent, 1.5 ba­sis points lower than the 5.411 per­cent reg­is­tered dur­ing the pre­vi­ous auc­tion af­ter the BTr capped the ac­cepted rates.

The P6 bil­lion of­fer­ing was slightly un­der­sub­scribed, with to­tal ten­ders

amount­ing to P5.955 bil­lion. How­ever, only P5.205 bil­lion of the amount was awarded.

On the other hand, the auc­tion com­mit­tee fully awarded P6 bil­lion worth of 182-day debt pa­pers at an av­er­age rate of 6.154 per­cent, de­clin­ing by 27 ba­sis points from the 6.424 per­cent posted in the pre­vi­ous week.

Healthy de­mand met the auc­tion as to­tal ten­ders al­most tripled to P17.26 bil­lion.

The av­er­age rate fetched by 364-day T-bills also plunged by 38.8 ba­sis points to 6.253 per­cent from 6.641 per­cent in the pre­vi­ous auc­tion.

In­vestors swarmed the P8 bil­lion of­fer­ing with P43.724 bil­lion in to­tal ten­ders, prompt­ing the BTr to in­crease the awarded vol­ume to P11.2 bil­lion.

Ac­cord­ing to Na­tional Trea­surer Ros­alia De Leon, the auc­tion re­ceived over­whelm­ing de­mand as funds are now re­turn­ing to the fi­nan­cial sys­tem af­ter the hol­i­day break.

“There’s de­mand. There’s liq­uid­ity... Liq­uid­ity in the sense that af­ter the Christ­mas break (funds) are re­turn­ing,” De Leon said.

“Then you’re also see­ing that given that peso has been strength­en­ing, so there’s in­flow. Even for the stocks we see for­eign buy­ing also in the mar­kets, we see that there’s also de­mand from off-shore,” she said.

The na­tional trea­surer also cited lower in­fla­tion­ary ex­pec­ta­tions this year, caus­ing banks and in­vestors to lean into the longer-end of the curve.

Due to ro­bust de­mand for the one-year se­cu­ri­ties, De Leon said the auc­tion com­mit­tee dou­bled the amount awarded for non-com­pet­i­tive bids, pur­suant to Depart­ment of Finance (DOF) Or­der 14195. This is why the vol­ume awarded for 364-day T-bills rose to P11.2 bil­lion.

“We can dou­ble the amount for the non-com­pet­i­tive bids…(un­der) Depart­ment Or­der 141. But it’s still a de­ci­sion of the auc­tion (com­mit­tee) on whether we would. But given the very strong de­mand for the oneyear,” she said.

More­over, De Leon said the BTr has de­cided to open the over-the counter (OTC) fa­cil­ity to pro­vide tax-ex­empt state cor­po­ra­tions ac­cess to T-bills of all tenors.

She said the tap fa­cil­ity will also be opened to ac­cept ad­di­tional bids for the 364day se­cu­ri­ties.

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