THE GOVERNMENT upsized the volume of Treasury bills (T-bills) it raised on Monday as rates declined across-the-board, pulled down by strong demand from investors holding excess cash.

The Bureau of the Treasury (BTr) borrowed P22 billion in T-bills yesterday, up from the original P20-billion program, as the offer was more than four times oversubscribed, with bids amounting to P87.187 billion.

National Treasurer Rosalia V. De Leon said the governments also opened the tap facility to raise another P10 billion via the one-year instruments.

The BTr made a full award of the P5 billion in 91-day T-bills it offered out of total tenders worth P22.322 billion. Rates for the three-month papers declined by 21 basis points (bps) to 2.269% from the 2.479% seen in the auction last week.

For the 182-day papers, the government decided to accept P7 billion in tenders, up from the programmed P5 billion, after the tenor attracted bids totaling to P27.321 billion. The six-month papers likewise fetched a lower average rate of 2.374% compared to the 2.625% posted last week.

The Treasury likewise raised P10 billion as planned via the 364-day papers from total bids of P37.544 billion at an average rate of 2.761%, down 18.4 bps from 2.945% previously.

Ms. De Leon said the auction committee decided to make a full award as average yields fell below secondary rate levels.

A bond trader said via Viber that strong demand pulled down rates anew as investors, “still awash with cash and excess funds nowhere to go,” have to put their money to work in safe-haven assets like government securities.

The trader said some investors might be “trying to save what is left” in their pool of funds instead of deploying cash for their businesses as situation here is still filled with uncertainty.

Metro Manila and some areas in the country have been placed under strict lockdown measures for two months until May 15, with officials still deliberating if these high-risk places are ready to reopen again.

Authorities have been warning of the possibility of a second wave of infections that could result in a heavier economic and death toll if these high-risk areas will be reopened prematurely.

Meanwhile, parts of Luzon deemed low-risk have started transitioning to a less strict lockdown last May 1, where non-essential businesses have been allowed to partially reopen while observing health safety protocols.

On Tuesday, the BTr will offer P30 billion worth of reissued seven-year Treasury bonds (T-bond) with a remaining life of two years and 11 months.

The government is planning to borrow P170 billion from the local market this month: P110 billion via its weekly T-bill auctions and the remaining P60 billion via T-bonds to be offered fortnightly. — Beatrice M. Laforga