T-bills fetch lower rates

Short-term government securities continued to fetch lower rates amid strong demand, according to the Bureau of the Treasury.

During yesterday’s auction, the BTr made a full award of P5 billion for the 91-day Treasury bills (T-bills ) at an average rate of 1.335 percent, 11.9 basis points lower than last week’s 1.454 percent.

Strong demand met the P5 billion offering with total tenders amounting to P21.79 billion.

Rates for the 182-day securities also averaged at 1.605 percent, two basis points lower than the 1.625 percent last week.

This allowed the BTr to fully award the P5 billion offering. Total tenders reached P16.65 billion, more than three times larger than the offer size.

Lastly, the average rate of 364-day debt papers declined by 1.2 basis points to 1.758 percent from 1.77 percent a week ago after the auction committee fully awarded the P10 billion offering.

The auction was almost 2.6 times oversubscribed with total bids amounting to P25.957 billion.

Interest rates of government securities have been recording steady decline since the 50-basis point rate cut announced by the Bangko Sentral ng Pilipinas (BSP).

In a text message to reporters, National Treasurer Rosalia de Leon said T-bills rates continued to decline amid strong demand from investors.

“Rates declined with strong demand on short tenors as investors await highlights of (President Duterte’s) SONA to address the health crisis and unveil recovery plan,” she said.

Given healthy demand from investors, de Leon said the auction committee decided to open its tap facility for oneyear T-bills, for a total target volume of P5 billion.

Aside from its regular auctions, the BTr is also offering the five-year retail Treasury bonds (RTBs) in the domestic market.

The BTr said proceeds of the RTB issuance would be used to aid the country’s efforts to mitigate the impact of COVID-19 and to support sectors most affected by the pandemic.