Treasury sells P20B in T-bills

The Bureau of the Treasury on Monday made a full award of P20 billion in treasury bills to quench investors’ appetite for short-term debt paper.

The tenders for the bills totaled P60.89 billion, making the auction oversubscribed by more than thrice.

For the 91-day bills, P8 billion were sold at an average rate of 1.397 percent, 14.4 basis points lower than the previous auction’s 1.541 percent. Investors tendered a total of P28.29 billion for the three-month IOUs.

The P6-billion worth of 182-day debt paper were sold also at a lower rate of 1.699, down 5.9 basis points from 1.758 percent previously. Tenders for the six-month bills totaled P19.85 billion.

As for the P6-billion, 364-day bills, the rate slightly rose by 0.1 basis point to 1.948 percent from 1.947 percent during the previous action. Investors tendered P12.75 billion for the one-year debt paper.

National Treasurer Roberto B. Tan told reporters that investors flocked to Monday’s auction on the back of expectations of stable inflation in February as well as US Federal Reserve Chair Janet Yellen’s “dovish tone” on the monetary policy of the world’s biggest economy.

“The market reacted positively to [those developments] by giving aggressive bids,” Tan said, adding that investors were also seeking new supply of debt after the Treasury rejected all bids for P25 billion in 10-year treasury bonds last month.

Meanwhile, Tan said the Treasury was ready to pursue domestic liability management this year, possibly by providing new supply to swap with maturing debt. “But now, there’s no decision yet. We’re monitoring the market and external factors. There’s no definite timetable, but it [liability management] might likely be the same as previous exercises where we extended maturities,” he said.

Also, Tan said the Treasury this week would come out with the live date of the implementation of the non-restricted trading environment for government securities—an initiative already postponed thrice.

“We will get feedback this week because the end-to-end market testing was extended to until last week due to request for an extension. We will start to get feedback from our own [Treasury] people, [and also] consult participants,” Tan said.

“I’m confident that after our discussions, we’ll be able to set a definite timetable,” he added. Ben O. de Vera