BTr to sell P20B more in treasury bills

The government on Tuesday put up an additional P20 billion worth of treasury bills for sale after yields fell to near zero on Monday.

In a public notice posted Tuesday on its website, the Bureau of the Treasury said it would sell P20 billion more of the same series of T-bills auctioned off through its tap facility on Monday.

Under the tap facility—an over-the-counter venue for purchasing government securities—the Treasury may offer additional debt instruments with interest rates set at a previous auction.

The Treasury may decide to open the tap facility when demand for T-bills or treasury bonds becomes substantial while interest rates tend to favor the government.

During the auction last Monday, T-bill yields fetched new record lows as the market reacted to the latest upgrade of the country’s credit rating by Moody’s Investors Service and to the shutdown of the US government.

The 91-day T-bill rate dropped by 86.5 basis points to a mere 0.001 percent.

The 183-day T-bill rate fell by 83 basis points to 0.09 percent.

The 364-day T-bill rate declined by 76.5 basis points to 0.19 percent.

Deputy Treasurer Eduardo Mendiola on Monday announced that the government would not sell any more T-bills than what was stated in the borrowing schedule. But the Treasurer later made a turnaround because of the near-zero borrowing costs.

During the auction on Monday, the Treasury sold P4 billion worth of 91-day bills, P6 billion worth of 182-day bills, and P10 billion worth of 364-day bills, as stated in the borrowing schedule.

There were way more bids for the short-term government securities than the actual amount being sold.

Tenders reached P38.59 billion, P35.46 billion and P34.61 billion, for the three-month, six-month, and one-year government securities, respectively.

Last week, Moody’s upgraded the credit rating of the Philippines by a notch to Baa3, the minimum investment grade.

The Philippines has secured the vital investment rating from all three major credit agencies. Fitch Ratings and Standard & Poor’s upgraded the country’s credit standing in March and May, respectively.—Michelle V. Remo