Treasury bill rates drop across the board

The Bureau of the Treasury (BTr) awarded all P20 billion in T-bills offered during Monday’s auction as yields dropped across the board.

The Treasury received a total of P51.98 billion in tenders for the short-term debt papers, making the auction oversubscribed by more than twice.

The Treasury said it made a full award due to “healthy market appetite” coupled with average annual rates that aligned below secondary market benchmarks.

For the benchmark 91-day treasury bills, P8 billion was accepted out of the P25.97 billion tendered. The yield for the IOUs maturing on May 25 dropped to 1.513 percent, down 17.1 basis points from 1.684 percent last month.

“Auction results revealed strong preference for the shorter-dated 91-day securities,” the Treasury said.

The Treasury received P16.35 billion in bids for the P6-billion worth 182-day T-bills offered. The average rate for the debt paper maturing on Aug. 24 slid to 1.508 percent, 13.4 basis points lower than the 1.642 percent yield posted during the previous auction.

As for the 364-day T-bills, investors tendered P9.66 billion for the P6-billion offered. The yield for the IOUs maturing on Feb. 22 next year went down to 1.678 percent or 6.2 basis points below the 1.74 percent at last month’s auction.

Last week, the Treasury fully awarded P25 billion in reissued five-year T-bonds at an average rate of 3.647 percent, down 15.3 basis points from 3.8 percent in the previous auction.

The offering was oversubscribed, with a total of P56.002 billion in tenders for the treasury bonds maturing on Aug. 20, 2020.

Also last week, the Philippines sold $2 billion in 25-year global bonds at a record-low yield of 3.7 percent, which the government said reflected sustained investor confidence in the country amid volatile markets.

The coupon for the US dollar-denominated sovereign bonds maturing in 2041 was not only lower than the initial pricing guidance of 4 percent but also even the lowest ever for an offshore issuance.

“The transaction was also the first sovereign US dollar bond issuance and the longest-dated US dollar bond issuance from Asia this year,” the Department of Finance (DOF) had said.

Of the proceeds, $500 million in new money will be infused into the budget, while $1.5 billion will be switched to retire previously issued IOUs maturing between October this year and October 2034.

According to the DOF, bids worth $8 billion were received for the new cash component, while $5.6 billion was tendered for the one-day accelerated switch tender offer.

Over half or 51 percent of the tenders for the global bonds came from the US, 32 percent were from Asia, and 17 percent from Europe.