Treasury bill rates fall across the board

The Bureau of the Treasury on Monday awarded all P15 billion in T-bills at rates that fell across the board amid strong demand.

The Treasury sold P6 billion in 91-day IOUs at an average rate of 2.148 percent, down from 2.205 period during the previous auction.

Investors tendered P23.946 billion for the three-month T-bills maturing on Aug. 23.

As for the P5 billion in 182-day debt paper, the Treasury accepted them at 2.494 percent, a lower rate than 2.602 percent previously.

Tenders for the six-month T-bills maturing on Nov. 22 reached P13.945 billion.

The Treasury also awarded P4 billion in 364-day government securities at 2.835 percent, an annual rate lower than the previous auction’s 2.966 percent.

Bids for the one-year IOUs maturing on May 23 next year hit P17.225 billion.

In all, a total of P55.116 billion were tendered for the P15-billion offering.

“We’re very pleased with the results, [which were] very good with the offers made by the GSEDs (government securities eligible dealers) so we hope that we continue to have this kind of auction henceforth,” National Treasurer Rosalia V. De Leon told reporters after the auction.

“[There’s] very strong appetite on the short end of the curve. There’s also ample liquidity … [and the market expects] that inflation will remain very much manageable, hence the strong appetite and very good and reasonable rates that were forwarded during the auction,” De Leon added.

As domestic interest rates remain relatively low, the Duterte administration wanted to finance its programmed wider budget deficit equivalent to 3 percent of the gross domestic product in the next six years through a borrowing mix of 80-percent local and 20-percent foreign.

The programmed deficit was widened to ramp up government spending on infrastructure under President Duterte’s 10-point socioeconomic agenda aimed at slashing the poverty incidence to 14 percent by 2022 from 21.6 percent in 2015. —BEN O. DE VERA