Swamped by huge demand for short-term debt instruments, the government easily sold the additional P20 billion worth of treasury bills it offered to the market on Wednesday.
The Bureau of the Treasury said it had sold P4 billion worth of 91-day bills, P6 billion worth of 182-day bills and P10 billion worth of one-year bills through its tap facility by the end of its one-day offering.
The T-bills sold were of the same series as those auctioned off last Monday.
Under the tap facility—an over-the-counter venue for purchasing government securities—the Treasury sells additional debt instruments using the interest rates set during a previous auction.
The Treasury may decide to open the tap facility when demand for T-bills or treasury bonds is deemed substantial and when interest rates are favorable to the government.
The decision to open the tap facility came after T-bill rates fell to nearly zero during the auction on Monday.
During the said auction, 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.
The across-the-board decline in T-bill rates came following the announcement by Moody’s Investors Service that it had upgraded the country’s credit rating to investment grade and amid the shutdown of the US government.
Treasury officials said these developments resulted in the shift in investor appetite from dollar-denominated instruments to peso-denominated securities.
Moody’s cited the healthy macroeconomic fundamentals of the country for its decision to upgrade the country’s debt rating.
Moody’s gave the Philippines a Baa3 rating, the minimum investment grade and a notch higher than the previous rating.