THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Monday on strong demand as investors continued to prefer safer assets.

The Bureau of the Treasury (BTr) on Monday borrowed P20 billion in T-bills as planned from total bids of P81.989 billion, which was four times the amount on the auction block.

The strong bids and lower rates prompted the BTr to open the tap facility and offer another P10 billion in one-year instruments.

Broken down, the Treasury awarded P5 billion in 91-day papers as planned out of tenders worth P20.427 billion. The average rate for the three-month T-bills moved sideways to 2.035% from the 2.038% seen last week.

The government raised another P5 billion as programmed via the 182-day T-bills from P15.615 billion in bids. The six-month papers fetched an average rate of 2.101%, inching up by 0.2 basis points (bps) from 2.099% previously.

For the 364-day instruments, the BTr accepted the programmed P10 billion as the tenor attracted tenders worth P45.947 billion. The one-year securities were quoted at an average rate of 2.35%, down 2.8 bps from 2.378%.

National Treasurer Rosalia V. de Leon said they made a full award on the back of strong liquidity and subdued rates.

“Market [is awaiting a] decision on quarantine measures,” Ms. De Leon told reporters on Monday via Viber.

“This auction still shows appetite for yields. Hence, [the one-year papers] exceeded demand by more than four times,” a bond trader said when asked to comment via Viber.

“Still, money has nowhere to go as of the moment but bonds,” the trader added.

President Rodrigo R. Duterte was expected to decide on Monday about the quarantine protocols for Metro Manila and other areas in the country for the second half of June.

Metro Manila eased restrictions on June 1 after it was placed under strict lockdown for more than 10 weeks starting mid-March.

However, daily reports of new coronavirus positive cases in the country have continued to rise since the start of June.

On Tuesday, the BTr is planning to borrow P15 billion via the 35-day T-bills.

The government plans to borrow P170 billion from the local market in June: P110 billion via weekly T-bill auctions and the remaining P60 billion in Treasury bonds to be offered fortnightly.

Also this week, the BTr will hold its first and second quarterly draws for Premyo Bonds on Thursday where bondholders will have a chance to win grand prizes of P1 million and a house and lot each for two winners, aside from other cash prizes. — Beatrice M. Laforga

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