Gov’t awards P20B in T-bills

MANILA, Philippines–The Bureau of the Treasury made a full award of the P20-billion worth of treasury bills auctioned on Tuesday as the appetite for short-term debt paper among local investors remained unaffected by a US interest rate hike scenario.

The tendered amount for the three tenors totaled P59.93 billion or almost thrice the total offering.

For the 91-day bills, the P8-billion offering was auctioned at an average rate of 1.144 percent, down 10 basis points from last month’s auction. The three-month paper maturing on Jan. 7 next year fetched P23.76 billion in bids.

The P6-billion worth of 182-day bills, meanwhile, had an average rate of 1.676 percent, up 2.6 basis points. For the six-month IOUs maturing on April 8, 2015, P16.51 billion were tendered by investors.

The one-year bills also worth P6 billion were auctioned at an average rate of 1.87 percent, up 0.6 basis points. The 364-day paper maturing on Oct. 7 next year fetched bids amounting to P19.66 billion.

“Average rates settled below secondary market trading levels amid healthy demand for short-term debt instruments,” the Treasury said in a statement. Finance Undersecretary Gil S. Beltran, who chaired the auction, noted that the country’s interest rates have been historically low on the back of “a lot of savings in the system.”

A full award was made, according to Beltran, as the economy in general and the financial system in particular remained “very stable” despite “ramblings” of tapering of the United States Federal Reserve’s quantitative easing or QE policy.

“The assessment was that eventually US interest rates will rise, but as of now they have yet to move,” Beltran noted.

It remains to be seen if higher US rates would impact on Philippine debt instruments, Beltran said. “We have very good finances—we have a lot of savings and these savings are not yet being used as of now.”

“If you look at our gross domestic savings and gross domestic investment, we have a lot of unused resources that will push rates down. The treasuries in the US will eventually go up—there’s no way but up. But how both will move, we don’t know,” Beltran told reporters.