THE GOVERNMENT made another full award of the Treasury bills (T-bill) it auctioned off on Monday as rates slipped across all tenors on the back of additional liquidity in the market amid P91-billion worth of maturing state debt.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at its T-bills auction yesterday. The offer was almost thrice oversubscribed as demand from investors totalled P43.1 billion, albeit slightly lower than the P49.4 billion recorded at last week’s offering.
Broken down, the government borrowed P4 billion as planned via the 91-day tenor yesterday as tenders amounted to P12.857 billion. The average rate for the papers slid 4.1 basis points (bp) to 3.203% from the 3.244% logged in the previous auction.
For the 182-day T-bills, the Treasury borrowed P5 billion as planned out of the P17.928 billion offered by banks and other financial institutions. The average yield likewise declined by 5.3 bps to 4.064% from the 4.117% quoted in the previous offering.
The government also made a full award of the 363-day papers, accepting the programmed P6 billion out of total offers amounting to P12.358 billion. Its average yield likewise declined 2.3 bps to 4.869% from last week’s 4.892%.
At the secondary market prior to the auction, three-month and six-month papers were quoted at 3.615% and 4.0651%, respectively, while one-year securities fetched a 5.1077% yield.
At the close of the trading, the yield on the 91-day T-bill was steady at 3.615%, while rates of the 182-day and 364-day papers went down to 4.0641% and 4.8366%, respectively.
National Treasurer Rosalia V. De Leon said the government opted for another full award yesterday given strong liquidity in the market.
“The appetite continues to be on the short end but nonetheless we see that the rates are already trending downwards,” Ms. De Leon told reporters on Monday.
“We have maturities of about P91 billion. P86 billion would mature [on Monday] and then another P5 billion within the week. That will also go to the system [as it will increase liquidity].”
She added that the 50-bp rate hike by the Bangko Sentral ng Pilipinas (BSP) earlier this month “calmed” the market.
“We see that after the 50-bp hike was delivered, I think that has also calmed the market. More or less, we see rates on a downward trajectory,” Ms. De Leon said.
The central bank’s policy-setting Monetary Board raised key rates by 50 bps on Aug. 9 — the third consecutive tightening move this year — to temper inflation expectations. Rates now stand at a 3.5-4.5% range.
“And also the pronouncements of [BSP Deputy Governor] Diwa [C. Guinigundo] that eventually inflation will peak sometime in September, so [market players] see that rates are also trending downwards.”
Meanwhile, a trader said the auction result was within market expectations.
“As expected, we saw strong demand on the Treasury bills due to the recent maturity of the bonds,” the trader said in a phone interview
“There’s also an upcoming maturity this Aug. 22 worth P5 billion so that drove the bids lower.”
The Treasury is set to raise P300 billion from the domestic market this quarter through auctions of securities, offering P195 billion in T-bills and another P105 billion in Treasury bonds.
The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product.
MARAWI BONDS
Meanwhile, Ms. De Leon said yesterday that the Treasury is discussing with the Bangon Marawi team the necessary funding for the planned retail Treasury bonds for the rehabilitation of the war-torn city.
“We are already discussing with the Bangon Marawi team in terms of the requirements and also about their plans and requirements,” she said, noting they are focused on the campaign to encourage Filipinos to participate.
Last week, the national treasurer said the government has already secured necessary approvals for the planned retail Treasury bonds for the rehabilitation of Marawi city worth an indicative P50-60 billion, but the timing of the offering has yet to be determined.
“The structure that we’re looking at for the Marawi bonds is we want everyone to contribute to help. Even for those [overseas Filipino workers] through online means because if they do that online, they don’t have to go through banks,” Ms. De Leon said. — Karl Angelo N. Vidal

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