THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday, with rates ending mixed amid fears of the economic impact of the Delta variant of the coronavirus disease 2019 (COVID-19).

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills on Monday as the offer was nearly three times oversubscribed, with tenders reaching P43.027 billion. The demand, however, was slightly lower than the P45.74 billion in bids seen at last week’s auction.

Broken down, the BTr borrowed the programmed P5 billion via the 91-day T-bills on Monday from P18.327 billion in bids. The three-month debt papers fetched an average rate of 1.05%, down by 3.2 basis points (bps) from the 1.082% seen last week.

It also accepted P5 billion as planned via the 182-day instruments as tenders for the tenor hit P13.75 billion. The average yield on the six-month papers inched up by 0.6 bp to 1.407% from 1.401% previously.

Lastly, the Treasury made a full P5-billion award of the 364-day securities even as the tenor attracted just P10.95 billion in bids. The one-year T-bills were quoted at 1.638%, a tad higher than the 1.629% fetched for the tenor last week.

National Treasurer Rosalia V. de Leon said T-bill rates moved sideways amid growing concerns that the continued spread of the Delta variant could result in stricter lockdown measures.

Despite this, she said “liquidity is still very much around looking for a home,” hence the demand for the short-term government papers.

The government on Friday placed Metro Manila and the provinces of Ilocos Norte, Ilocos Sur, Davao de Oro and Davao del Norte under general community quarantine “with heightened restrictions” until the end of the month to stem the spread of the virus.

The Health department on Sunday reported 55 new cases of the Delta variant of COVID-19 in the country, bringing the total to 119 infections so far.

Overall, there were 5,479 new COVID-19 infections reported that day, which brought the country’s active cases of the virus to 54,262.

Meanwhile, a bond trader said by phone that the yields fetched for the T-bills on Monday fell within market expectations, noting that the rate of the 91-day papers inched down amid strong demand.

Moving forward, the trader said T-bill rates could continue moving sideways as the market is waiting for leads, particularly from the upcoming two-day meeting of the Federal Open Market Committee this week.

The Federal Reserve meets on Tuesday and Wednesday and, while no change in policy is expected, Fed Chair Jerome Powell will likely be pressed to clarify what “substantial further progress” on employment would look like, Reuters reported. The Fed is likewise expected to discuss the timing of its stimulus tapering.

On Tuesday, the BTr will auction off P35 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and eight months.

The Treasury is looking to raise P235 billion from the local market this month: 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. — Beatrice M. Laforga with Reuters