P15B T-bills fully awarded; short-dated IOUs preferred by market

National Treasurer Rosalia de Leon (INQUIRER FILE PHOTO)

MANILA — The Bureau of the Treasury sold all P15 billion in T-bills it offered Monday amid robust demand for short-dated instruments.

The Treasury awarded P6 billion in 91-day IOUs at an average rate of 2.103 percent, down 4.5 basis points from 2.148 percent during the previous auction. Investors tendered P25.08 billion for the three-month T-bills maturing on Sept. 6.

As for the P5 billion in 182-day debt paper, the Treasury accepted them at 2.456 percent, 3.8 basis points (bps) lower than 2.494 percent previously. Tenders for the six-month T-bills maturing on Dec. 6 reached P14.677 billion.

The Treasury also sold P4 billion in 364-day government securities at 2.85 percent, an annual rate 1.5-bps higher than the previous auction’s 2.835 percent. Bids for the one-year IOUs maturing on June 6 next year amounted P12.069 billion.

In all, a total of P51.826 billion were tendered for the P15-billion offering.

“We had a good auction given that liquidity is on the short end of the curve,” National Treasurer Rosalia V. De Leon told reporters, citing that trusts could no longer bid for the Bangko Sentral ng Pilipinas’ term deposit facility starting next month.

“We see that rates are also reasonable. While there is the expectation of a possibility of a June rate hike [by the US Federal Reserve], still, the BSP and even the consensus of economists [was that] domestic inflation will remain within target—in fact, it might even be a tad lower than what we had in the previous month,” De Leon added.

The Department of Finance sees inflation slightly easing to 3.2 percent year-on-year in May from April’s 3.4 percent mainly on the back of lower prices of food items such as vegetables.

The government will release May inflation data on Tuesday.

As of the end of April, headline inflation averaged 3.2 percent, still within the government’s target range of 2-4 percent for 2017.  SFM