THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday on the back of low rates and strong demand, as investors flocked to safe-haven assets.

The Bureau of the Treasury (BTr) raised P30 billion as planned via the two-year T-bonds that have a remaining life of one year and eight months.

The tenor attracted bids worth P109.546 billion, making the offer more than three times oversubscribed.

Strong demand prompted the BTr to open its tap facility to raise another P15 billion.

The two-year notes fetched an average rate of 3.052%, with the highest rate at 3.08%, both lower than the 3.232% quoted for the bonds at the secondary market.

National Treasurer Rosalia V. de Leon said they made a full award to take advantage of low rates and strong bids.

“Auctions have been on full awards and are able to mobilize more from tap because of low rates and oversubscription,” Ms. De Leon told reporters via Viber.

A bond trader said investors are opting to cash in on the shorter end of the curve as there is “too much liquidity but people have no appetite for more risks” due to concerns on the economic fallout from the coronavirus pandemic.

“Bonds, in general are attractive because it is the safest asset. And right now, we can see that there is appetite…in the longer tenors. But just goes to show in this auction there’s too much money looking for safety,” the trader said via Viber.

The Bangko Sentral ng Pilipinas (BSP) has been firing off stimulus measures to cushion the blow of the pandemic on the economy, with BSP Governor Benjamin E. Diokno saying earlier this week that further monetary easing is “still in the agenda.”

The central bank has slashed policy rates by 125 basis points (bps) this year, the latest being the 50-bp off-cycle cut on April 16.

Following this, rates for the overnight deposit and lending facility have also been trimmed to 3.25% and 2.25%, respectively.

These rates are the lowest on record and also since the BSP shifted to an interest rate corridor in 2016.

It has also injected fresh liquidity to the market after it trimmed universal and commercial banks’ reserve requirement ratio by 200 bps to 12%. — B.M. Laforga