Demand for T-bills to drop further
BIDS for Treasury bills (T-bill) on offer today may be rejected anew by the government on the back of dampened demand following the successful retail bonds offering last month.
The Bureau of the Treasury is looking to raise P20 billion today from its auction of T-bills, broken down into an P8-billion offering for the three-month tenor, and P6 billion each for six-month and one-year debt papers.
Traders said over the weekend that they are expecting low demand for the offer as the 20th issuance of retail Treasury bonds (RTB) capped the demand for the subsequent regular auctions.
“I believe so. Liquidity has been tight recently, so I guess demand will not be that good for T-bills,” a trader said in a text message when asked if the RTB issuance will affect today’s auction.
Another trader noted in an earlier interview that most funds were already used to fund RTBs, pulling the interest away from the succeeding debt paper issuances.
At its auction last Nov. 27, the government rejected all bids for the T-bills up for auction as it saw weak demand following its offer of retail bonds.
The Treasury rejected bids totalling P10.5 billion, falling short of the planned P20-billion borrowing.
Broken down, the 91-day debt paper was met with demand worth P3.995 billion, lower than the Treasury’s offer of P8 billion.
The Treasury also rejected P3.466 billion worth of bids for the 182-day tenor, which also fell short of its P6-billion offer.
Lastly, the 364-day debt papers attracted P3.021 billion in demand, also below the programmed borrowing of P6 billion.
At the secondary market on Friday, yields on the three-month, six-month and one-year papers closed at 3.1554%, 3.2839% and 3.1285%, respectively.
Meanwhile, the government raised P255.4 billion from its offer of RTBs. The Treasury said “strong public demand led the RTBs to be oversubscribed multiple times.”
The government set the initial offer at P30 billion. The Treasury issued P130 billion in RTBs during the auction, while P125.4 billion worth was issued during the Nov. 20-27 offer period. — KANV
