91-day T-bill yield falls to 0.05%

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Interest rates on treasury bills stayed below 1 percent during Monday’s auction, with the yield on the 91-day securities plunging to a new record low of 0.05 percent.

National Treasurer Rosalia de Leon said in an interview that the results were probably due to the excess liquidity in the domestic securities market as well as expectations that inflation would remain low.

Monday’s results were mixed, with the yield on the 182-day bill easing to 0.3 percent while that for the 364-day bill rising to 0.763 percent.

The latest rate for the three-month bill was 14.8 basis points lower than the previous average. For the six-month bill, it was 2.2 basis points lower and for the yearlong bill, it was 15.7 basis points higher.

The result for the benchmark bill was 24 basis points lower than the corresponding 0.29 percent for done deals at the private-run Philippine Dealing and Exchange Corp.

In the secondary market, prevailing rates for the 182-day bill was 27.5 basis points higher at 0.575 percent, and for the 364-day bills, 3.8 basis points lower at 0.725 percent.

The Bureau of the Treasury raised a total of P15.8 billion instead of the planned P15 billion. Investors tendered a total of P62.62 billion, or more than four times the total offering.

De Leon expressed pleasure with the market’s reception of the Treasury’s first auction for the year, particularly as the government has just started implementing a revised schedule of offerings.

Auctions are now held monthly—but with larger offer volumes—for both treasury bills and bonds. Previously, these were held every two weeks.

Asked when the government planned to issue global bonds this year, De Leon said there were no such plans yet. In the past several years, the government has been going to the international commercial market every January.

She said the plan for this year was to source 20 percent of the government’s funding deficit from overseas lenders.

“There is no need to do so at the moment, but that is part of the financing program because we have to maintain our presence in the foreign market,” De Leon added.

De Leon said the Treasury was likely to issue the so-called onshore dollar bonds rather than global bonds. The Treasury late last year issued $500 million worth of these dollar-denominated securities that were meant for domestic buyers.

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