T-bill rates up slightly despite oversubscription

Despite marginal yield increases, the Bureau of the Treasury on Monday sold all of the P15 billion in treasury bills it offered amid strong demand.

The Treasury awarded P4 billion in the benchmark 91-day IOUs at an average rate of 5.172 percent, up from 5.077 percent last week.

Also, the Treasury accepted P5 billion in 182-day debt paper at 6.245 percent, up from 6.233 percent during the previous auction.

As for the 364-day securities, the Treasury sold P6 billion at an annual rate of 6.521 percent, up from 6.506 percent previously.

Bids totaled P28.6 billion for the three tenors, making the auction almost twice oversubscribed.

“It’s a very healthy auction. We saw that rates were really flat, they have plateaued. For both the 182- and 364-day, the [rate] increases were very marginal over last week’s auction and aligned with the secondary market rates,” National Treasurer Rosalia V. de Leon told reporters after the auction.

De Leon attributed the demand for short-term government securities to “expectations that inflation might already be trending downwards.”

She noted that there was a “significant” reduction in month-on-month price increases to 0.3 percent last month from 0.9 percent in September.