T-bill rates further fall across the board

Treasury bill rates further declined across the board Tuesday, allowing the Bureau of the Treasury to sell all P15 billion in short-dated debt paper it offered.

Moving forward, the Treasury expects yields to consolidate amid a flurry of external developments and the about two-year low rates.

The Treasury sold P4 billion in benchmark 91-day T-bills at an average of 4.385 percent, down 6.8 basis points (bps) from 4.453 percent last week.

It also awarded P5 billion in 182-day treasury bills at 4.723 percent, 13.3-bps lower than 4.856 percent previously.

As for the P6 billion in 364-day debt paper, the annual rate declined by 6.4 bps to 4.986 percent from 5.05 percent a week ago.

Tenders across the three tenors totaled P50 billion, making the auction over three times oversubscribed.

Deputy Treasurer Sharon P. Almanza told reporters that the Treasury had expected the strong demand for short-dated IOUs.

For one, Almanza said the market priced in the Treasury’s earlier pronouncement that the planned domestic borrowings for the third quarter would be lower compared to levels in the previous quarters.

Almanza noted that the government had already raised more than half of its financing requirement for 2019, amounting to P1.2 trillion.

For Almanza, among the external developments that were seen impacting on rates and will put the market on wait-and-see moving forward include the discussions between US President Donald Trump and China President Xi Jinping at the G-20 meeting amid the two economic giants’ ongoing trade war, as well as expectations of rates easing for both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP). —BEN O. DE VERA