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T-bill rates rise across the board

Treasury still weighing timing of retail bond issuance
By: - Reporter / @bendeveraINQ
/ 05:08 AM February 12, 2019

National Treasurer Rosalia de Leon / INQUIRER FILE PHOTO

The Bureau of the Treasury sold all P20 billion in T-bills it offered Monday amid robust demand even as rates rose across the board ahead of a possible retail treasury bond (RTB) offering this year.

The Treasury awarded P6 billion in 91-day IOUs at 5.55 percent, up from 5.484 percent last week.

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It also sold P6 billon in 182-day debt paper at 5.933 percent, up from 5.867 percent during the previous auction.

All P8 billion in 364-day Treasury bills were also awarded at 5.983 percent, also higher than the 5.924 percent previously.

In all, investors tendered P30.32 billion across the three tenors, making the auction 1.5 times oversubscribed.

National Treasurer Rosalia V. de Leon told reporters after the auction that the strong demand reflected market response to recent dovish statements from the US Federal Reserve as well as the Bangko Sentral ng Pilipinas’ decision last week to keep interest rates steady.

De Leon attributed the higher yields of short-dated securities to news last week of another RTB sale in the offing.

“That’s anticipated by the market given that we have a P70-billion maturity on Feb. 19. But for now, given that we still have a very strong cash position, that’s something that we still have to confirm whether to move ahead,” De Leon said.

She said the budgetary requirements for 2019 as well as near-term interest rate environment would allow the Treasury to determine if it would push through with an RTB sale.

“And, of course, the demand. We have to consider the tenor that investors will find more attractive to be able to buy the RTBs,” she said, adding that the maturity would likely be “at the belly of the curve.”

The Duterte administration during its first two years in office already sold RTBs to small investors four times.

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In June last year, the government issued P121.8 billion in three-year RTBs at 4.875 percent. In December 2017, the Treasury raised P255.4 billion from RTBs, the biggest issuance to date, selling five-year debt paper at 4.625 percent. In April 2017, the Treasury sold P181 billion in three-year RTBs at a coupon of 4.25 percent. In September 2016, the Treasury issued P100 billion in 10-year RTBs at a 3.5-percent yield.

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