THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Monday as rates continued to decline across the board on the back of strong demand.

The Bureau of the Treasury (BTr) borrowed P15 billion as planned via the T-bills on Monday as the offer was met with P53.567 billion in tenders, making it over three times oversubscribed. However, demand was lower than the P59.064 billion in bids logged during last week’s auction.

Broken down, the Treasury raised the programmed P5 billion via the 91-day T-bills from P19.75 billion in bids. The average rate of the three-month papers fell by 4.7 basis points (bps) to 1.031% from 1.078% previously.

The government also accepted P5 billion as planned in bids for the 182-day debt after the tenor attracted tenders worth P18.427 billion. The six-month T-bills fetched an average rate of 1.332%, down by 1.6 bps from last week’s 1.348%.

Lastly, the BTr made a full P5-billion award of the 364-day securities as total bids reached P15.39 billion. The average rate of the tenor dipped to 1.562% from the 1.563% quoted at the previous auction.

National Treasurer Rosalia V. de Leon told reporters in a Viber message after Monday’s auction that the strong demand for the short-term debt papers continued to pull down rates.

Meanwhile, a bond trader said the T-bills’ average rates fell within market expectations.

“People prefer shorter tenors to be safe until more evidence or catalysts resurface,” the trader said.

Investors have been flocking to safe-haven assets like government securities as the coronavirus pandemic continues to cause market volatility.

This week’s auctions of government debt are the last ones for June. The BTr wants to borrow P215 billion from the local debt market this month: P75 billion via weekly offers of T-bills and P140 billion from weekly auctions of Treasury bonds (T-bonds).

It raised P95 billion via the T-bills versus the P75-billion program as it opened its tap facility several times to accommodate strong demand and take advantage of the low rates fetched for the papers.

On Tuesday, the Treasury is looking to raise P35 billion from an offering of reissued 20-year T-bonds, which have a remaining life of 11 years and eight months.

Next month, the Treasury is programmed to raise P235 billion from the local market: P60 billion via weekly offers of T-bills and P175 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion from domestic and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. It runs on a budget deficit as it spends more than the revenue it generates to support the economy’s recovery.

The Philippines on Monday returned to the US global bond market, offering 10.5-year and 25-year dollar-denominated notes at benchmark sizes.

This is the third time this year that the government tapped the international debt market after it raised €2.1 billion via its euro bond sale in April and the ¥55 billion from its Samurai bond offering in March. — B.M. Laforga