THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Monday as yields inched down as the market remains awash with cash and despite lingering uncertainties due to the coronavirus pandemic.

The Bureau of the Treasury (BTr) borrowed P20 billion as planned via the T-bills on Monday as the offer was more than four times oversubscribed, with bids amounting to P81.825 billion.

Broken down, the BTr awarded the programmed P5 billion in 91-day papers as tenders reached P23.44 billion. The three-month debt fetched an average rate of 1.079%, down by 0.7 basis point (bp) from the 1.086% seen at the previous auction.

The government borrowed another P5 billion as planned in 182-day T-bills as bids stood at P27.576 billion. The six-month papers were quoted at an average rate of 1.543%, declining by 5.4 bps from 1.597% at last week’s auction.

The Treasury also made a full P10-billion award of the 364-day debt yesterday as bids reached P30.809 billion. The one-year T-bills fetched an average rate of 1.791%, inching down by 0.2 bp from the 1.793% quoted during the previous offering.

To accommodate excess demand, the Treasury also opened its tap facility window yesterday to raise another P5 billion each via the 182-day and 364-day T-bills.

National Treasurer Rosalia V. de Leon said the decline in T-bill yields yesterday indicates continued strong liquidity in the market.

“It was a full award with hefty submission and with rates aligned with secondary levels. This demonstrated sustained liquidity onshore,” Ms. De Leon told reporters in a Viber message after the auction on Monday.

At the secondary market on Monday, the three-month, six-month and one-year T-bills fetched yields of 1.137%, 1.586% and 1.799%, respectively, based on the PHL Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

Meanwhile, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said investors continue to prefer the short-tenored T-bills amid uncertainties in the economic outlook.

“Lack of fresh leads and outlets for the abundance of cash on hand pushed investors to the safest and, for now, only game in town: T-bills,” Mr. Mapa said in an e-mail.

“With domestic activity still hobbled by concerns about the virus and overall challenging job market, we do expect these trends to persist for the balance of the year,” he added.

The Treasury wanted to raise P140 billion from the domestic market this month: P80 billion in weekly T-bill auctions and P60 billion in fortnightly Treasury bond auctions. Yesterday’s offering was the last one for October.

During the month, it made full awards of its offerings of government securities and even opened its tap facility several times as demand stayed strong, with the market looking for safe investment outlets to put their excess cash to work.

The government wants to borrow around P3 trillion this year from local and foreign lenders to help fund its budget deficit expected to hit 9.6% of the country’s gross domestic product. — K.K.T. Jose