91-day T-bill rate falls below 1%

The Bureau of Treasury noted “a lot of liquidity” as the yield on the 91-day treasury bills again fell below 1 percent during Monday’s auction.

The yield on the 91-day treasury bills again fell below 1 percent, easing to an average 0.979 percent as investors swamped Monday’s government auction.

The average rate was 109.4 basis points lower than the 2.073 percent set in the previous auction two weeks ago.

Also, Monday’s average was 87.1 basis points lower than the corresponding yield for deals done in the secondary market that averaged 1.85 percent.

Interest rates on the 182-day treasury bills also fell 125 basis points to an average 1 percent while those for the 364-day paper slid to an historic low of 1.5 percent.

The average for the six-month bill was 97.5 basis points lower than the prevailing average for deals at the Philippine Dealing and Exchange Corp. trading board, which was 1.975 percent.

On the other hand, the average for the year-long bills was 87.5 basis points lower than the 2.375 percent in the secondary market.

The Treasury awarded P3 billion in six-month bills and P4 billion in year-long securities, which were the full amounts it offered for each maturity.

National Treasurer Roberto B. Tan said the auction results indicated that there was “a lot of liquidity [and that fund managers] are looking for investment opportunities.”

Tan said the market’s behavior on Monday might have been influenced by the withdrawal of funds from the local stock market.

“Some of the T-bill subscriptions may be from foreign investors who cannot go to special deposit accounts,” Tan added.

The SDA facility is one of the tools that the Bangko Sentral ng Pilipinas uses to control the supply of money in the local economy and this, in turn, influences consumer prices. However, unlike treasury bills, SDAs cannot be traded.

As for the benchmark bill, the government raised P2.8 billion, or P800 million more than planned due to the high volume of tenders.

On Monday, the government raised a total of P9.8 billion with investors offering a total of P43.03 billion. Tenders for the three-month bills reached P14.69 billion or more than seven times the P2 billion on offer. Bids for the six-month bills reached P13.7 billion, or more than four times the P3 billion available. Tenders for the year-long bill totaled P14.64 billion, more than thrice the offer of P4 billion.