THE GOVERNMENT on Monday hiked its award of Treasury bills (T-bills) amid a sustained decline in rates on the back of strong liquidity.

The Bureau of the Treasury (BTr) raised P22 billion via its offer of T-bills on Monday, higher than its P20-billion program, as it accepted more bids from the non-competitive sector for the six-month papers.

The offering was almost four times oversubscribed, with tenders reaching P86.715 billion.

The Treasury also opened its facility to raise another P5 billion via the one-year securities.

The BTr borrowed P5 billion as planned via the 91-day T-bills out of total tenders worth P21.45 billion. The average rate of the three-month papers stayed below the one-percent level, going down by one basis point (bp) to 0.977% from 0.987% last week.

Meanwhile, it awarded P7 billion worth of 182-day T-bills, higher than the programmed P5 billion, as the Treasury doubled the accepted non-competitive bids to P4 billion after bids for the tenor reached P22.22 billion. The six-month instruments fetched an average rate of 1.36%, down 0.9 bp from 1.369% previously.

Lastly, the Treasury made a full P10-billion award of the 364-day securities on offer on Monday as tenders hit P43.045 billion. The one-year papers were quoted at an average rate of 1.605%, down 0.9 bp from the previous rate of 1.614%.

National Treasurer Rosalia V. de Leon attributed the continued decline in T-bill rates to robust liquidity in the market and strong appetite for short-term papers.

“Rates trending down with abundant liquidity. Preference is on the front end of the curve,” Ms. De Leon told reporters via Viber after the auction on Monday.

A bond trader said “the result was as expected, with the rates moving sideways.”

“The yields declined on continued strong demand on the short tenor due to strong market liquidity,” the trader said by phone.

The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of T-bills and P60 billion from fortnightly Treasury bond offerings.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — B.M. Laforga