THE GOVERNMENT upsized the amount of Treasury bills (T-bills) it accepted on Monday and even opened the tap facility as rates continued to slide amid strong demand for state debt.

The Bureau of the Treasury (BTr) awarded P28 billion in T-bills yesterday, up from the programmed P20 billion, as total tenders reached P96.026 billion or nearly five times the initial offer.

The BTr also opened the tap facility to offer another P10 billion in one-year instruments.

Broken down, the government hiked to P7 billion its award of 91-day T-bills, from the programmed P5 billion and out of tenders worth P21.751 billion. The three-month papers fetched an average rate of 2.038%, down 0.8 basis point (bp) from the 2.046% seen in the auction last week.

It raised another P7 billion via 182-day papers, up from the programmed offer of P5 billion, as total bids reached P19.375 billion or almost four times the amount on the auction block. The average rate for the six-month papers also declined 1.9 bps to 2.099% from 2.118% previously.

The government likewise increased to P14 billion the volume of 364-day securities it awarded from the P10-billion plan as its average yield went down to 2.378% from the 2.42% fetched last week. The one-year papers attracted bids worth P54.9 billion, prompting the Treasury to offer another P10 billion via its tap facility.

Following the auction, National Treasurer Rosalia V. de Leon said government bond yields are still within the level of the headline inflation rate, which slowed to 2.1% in May.

Ms. De Leon said rates of the short-term papers continue to go down as investors’ “bias towards safe haven prevails.”

A bond trader also attributed the decline in rates to cautiousness in the market over the growth outlook for the Philippines this year, as the economy is expected to contract by 2-3.4%.

The trader said they do not expect affected businesses to have a “bullish mindset” on the domestic economy over the near term after bearing the brunt of a stalling economy, “especially if there are no clear plans of government support.”

The government plans to borrow P170 billion from the local market in June: P110 billion via weekly T-bill auctions and the remaining P60 billion in Treasury bonds to be offered fortnightly.

Meanwhile, Ms. De Leon yesterday said the BTr will finally push through with its first and second quarterly raffle draws for its Premyo Bonds on June 18 following their postponement in March due to the government’s quarantine measures due to the coronavirus pandemic.

“The long wait is over. We will raffle not one (P1 million) but P2 million, and two house and lot on June 18,” she told reporters.

Launched in December, the BTr raised nearly P5 billion via the one-year Premyo bonds. Bondholders were given raffle tickets to participate in the quarterly draws to win prizes worth P4.5 million in total.

The BTr is supposed to conduct one raffle draw per quarter to pick some 116 winners, with one winning the grand prize of P1 million, 15 people receiving P100,000 each and 100 winners of P20,000 billion.

Apart from the cash rewards, the quarterly raffle prize pool will also include condominiums and houses and lots, all net of taxes, fees and charges. — Beatrice M. Laforga