91-day T-bill rate steady at 0.001%

Substantial foreign demand kept the rate for the bellwether 91-day treasury bills at the previously registered historic low and pushed the yield for the 182-day debt paper to a new record low.

National Treasurer Rosalia de Leon said foreign portfolio investors on Monday manifested significant appetite for peso-denominated government securities, accounting for the bulk of the bids for the short-term debt instruments and causing oversubscription.

Amid uncertainties in the global economy, De Leon said foreign investors wanted to shift funds to pesos through the purchase of virtually risk-free, peso-denominated government securities. They expect to benefit from such a move as they project an appreciation of the local currency over the short term.

In the latest monthly auction for short-term government securities Monday, the 91-day rate stayed at 0.001 percent, the same as the record low posted in October. Bids for the three-month debt paper hit P59.16 billion, overwhelming the Bureau of the Treasury, which offered only P4 billion worth of securities.

“There was significant demand from offshore amid currency play. They [foreign portfolio investors] are investing here amid expectations of peso appreciation,” De Leon told reporters after the auction.

The rate for the 182-day securities settled at 0.001, the same as that for the 91-day bills. This was a new record low for the government’s six-month borrowing cost and was 8.9 basis points lower than the 0.09 percent recorded last month.

Demand for the six-month debt paper reached P24.78 billion, dwarfing the government’s debt offering of only P6 billion.