T-bill rates continue on a downtrend

Rates for short-term government securities continued their downtrend yesterday as demand from investors remained strong amid robust liquidity in the system.

During yesterday’s auction, the 91-day Treasury bills (T-bills) fetched an average rate of 0.917 percent, 5.2 basis points lower compared to the 0.969 percent recorded last week.

Total tenders amounted to P19.56 billion, almost four times higher than the P5 billion offering. This, along with the lower rates, prompted the Bureau of the Treasury (BTr) to double the accepted non-competitive bids for the securities, resulting in a total award volume of P7 billion instead of P5 billion.

The average rate for the 182-day debt papers likewise declined by 11.3 basis points to 1.21 percent from 1.323 percent in the previous auction a week ago.

Healthy demand met the P5 billion offering as total tenders reached P33.456 billion. As a result, the auction committee decided to upsize the awarded volume to P7 billion by doubling the accepted noncompetitive bids.

Lastly, rates for the 364-day T-bills averaged at 1.492 percent, five basis points lower than last week’s level of 1.542 percent.

The auction was more than five times oversubscribed with P50.63 billion in total bids. The BTr fully awarded the P10 billion offering, with the accepted noncompetitive bids doubled to P4 billion.

Overall, the auction attracted P103.65 billion in total bids, more than five times higher than the P20 billion initial offer size. A total of P24 billion was awarded.

In a text message to reporters, National Treasurer Rosalia de Leon said rates declined as investors swarmed the auction facility amid strong demand in the financial system.

“Rates fell in spite of higher inflation for January as market (is) flushed with funds,” de Leon said.

According to the Bangko Sentral ng Pilipinas (BSP), inflation in January likely settled at 3.7 percent due to higher prices of fuel, power, meat, and “sin” products, namely alcoholic beverages and tobacco products.

The latest estimate is faster than the 3.5 percent recorded in December and the 2.9 percent posted in January 2020. – Mary Grace Padin