THE GOVERNMENT fully awarded the Treasury bills (T-bills) it offered on Monday as rates declined ahead of central banks’ meetings this week.

The Bureau of the Treasury raised P10 billion as planned via its offer of T-bills on Monday, with demand amounting to P52.758 billion or more than five times the amount on the auction block. Bids were also higher than the P41.285 billion in tenders seen a week earlier.

Broken down, the government sold P2 billion in 91-day securities as planned from tenders amounting to P16.757 billion. The tenor fetched an average rate of 1.125%, down by 3 basis points (bps) from the 1.155% logged in the prior auction.

The BTr also made a full P3-billion award of its offer of 182-day instruments, which attracted bids amounting to P19.36 billion. The six-month paper’s average rate stood at 1.385%, dropping by 5.8 bps from the 1.443% quoted previously.

Lastly, the government raised P5 billion as programmed through its offer of 364-day T-bills as demand hit P16.641 billion. The average rate of the tenor dipped 1.8 bps to 1.625% from 1.643% a week earlier.

At the secondary market prior to the auction on Monday, the three-month, six-month, and one-year securities were quoted at 1.2039%, 1.4505%, and 1.6774%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

“[We] saw strong participation with the auction being last for T-bills and redemption of P28.56 billion this week, including maturing Premyo bonds,” National Treasurer Rosalia V. de Leon said in a Viber message.

Ms. De Leon added that they are studying if another Premyo bond offering is possible in January.

A trader in a Viber message said lower supply as the year comes to an end also caused the decline in T-bill yields.

“The lack of new catalysts also comes into play, making investors comfortable in deploying excess funds,” he added.

Meanwhile, Bank of the Philippine Islands Chief Market Strategist Marco Miguel M. Javier said market participants factored in the upcoming monetary policy meetings of several central banks, including the Bangko Sentral ng Pilipinas (BSP).

“Investors still view T-bills as a good outlet to ride out current volatility ahead of major global and ASEAN central bank meetings this week amidst persistently high inflation,” Mr. Javier said in a Viber message.

The BSP will have its last policy review for the year on Thursday.

All 15 analysts polled by BusinessWorld last week expect the Monetary Board to keep benchmark rates steady to support the economy amid the threat of the Omicron variant of the coronavirus disease 2019.

The BSP’s policy review will come a day after the US Federal Reserve’s meeting on Tuesday to Wednesday. Fed officials have recently become more hawkish, citing the need to consider a faster tapering of its asset purchases as economic conditions improve.

For this month, the Treasury is planning to raise P70 billion from the domestic market: P30 billion via T-bills and P40 billion from Treasury bonds (T-bonds).

Monday’s T-bill auction and Tuesday’s seven-year T-bond offer are the last for the year.

The government wants to raise P3 trillion from local and external sources this year to fund a budget deficit seen to hit 9.3% of the country’s gross domestic product. — Luz Wendy T. Noble