T-bill rates down across the board

The Bureau of the Treasury (BTr) yesterday fully awarded P20 billion worth of short-term government securities as Tbills continued to fetch lower rates amid strong demand from investors.

During yesterday’s auction, rates for the 91-day Treasury bills averaged at 1.587 percent, 6.2 basis points down from 1.649 percent last week.

The P5 billion offering was more than four times oversubscribed as total tenders amounted to P21.065 billion.

The average rate for the 182-day securities likewise declined by 6.3 basis points to 1.687 percent from the 1.75 percent a week ago.

Healthy demand met the auction with total tenders amounting to P27.1 billion, more than five times larger than the P5 billion offering.

Lastly, the 364-day debt papers fetched an average rate of 1.782 percent, 7.3 basis points lower than last week’s level of 1.855 percent.

Total tenders reached P45.809 billion, around 4.5 times higher than the P10 billion offer volume.

In a text message to reporters, National Treasurer Rosalia de Leon said the results of the auction reflect the market’s preference for safe investment instruments amid the pandemic.

“Rates dropped because investors prefer safe havens and shorter tenor GS (government securities),” de Leon said.

Despite the low interest rate environment for government securities, de Leon said investors should still be encouraged to invest in the BTr’s upcoming Retail Treasury bond (RTB) sale as they are safer than other investment options in the private sector.

“RTBs are more safe, (with) very minimal risk since (they are) government issued,” she said.

Moreover, the national treasurer said RTBs would give small investors an opportunity to contribute to the country’s economic recovery from the impact of the coronavirus disease 2019 or COVID-19 pandemic.

“By investing in RTBs, you invest for your future and support the government towards a quick recovery. That is more rewarding,” she said.

The government is planning to offer at least P30 billion in five-year RTBs starting June 16 until Aug. 17 to raise new funds amid the pandemic, while also refinancing maturing debt.

The RTB issuance will have a debt swap component as holders of maturing bonds, particularly RTB 10-01, fixed rate treasury note (FXTN) 0573, RTB 10-02 and FXTN 07-57, may exchange their old debt notes for the new RTBs.

This would be the 24th RTB tranche to be issued by the government and the second this year.