T-bill rates rise on Taal jitters, but PH taps euro market in first offshore borrowing for 2020

Treasury bill rates on Monday (Jan. 20) rose across the board as the market went jittery following Taal Volcano’s eruption last Jan. 12.

As a result, the Bureau of the Treasury sold only P14.71 billion out of the P20-billion offering of short-dated securities as it capped rates for the 182- and 364-day debt paper despite tenders that totalled P33.5 billion across the three tenors, or maturity periods, making the auction over 1.5 times oversubscribed.

The Treasury awarded all P6 billion in the benchmark 91-day T-bill at 3.39 percent (up from 3.328 percent last week); P3.02 billion in 182-day at 3.652 percent (up from 3.587 percent) out of a P6-billion offering; and P5.69 billion in 364-day at 3.971 percent (up from 3.896 percent) out of an P8-billion offer.

Instead of a dollar-denominated global bond sale at the start of the year, National Treasurer Rosalia V. de Leon said the Philippines started to invite investors to gobble up benchmark-sized euro-denominated bonds or at least 500 million euros’ worth also on Monday.

“We’ve been opening markets every year with dollar bonds, but this time we would want to approach European investors coming from a very strong order book last year—there were spillovers we’re not able to accept. So we’re coming back for this issue,” De Leon explained.

In May 2019, the Philippines returned to the euro debt market to end the country’s 13-year absence, selling 750 million euros in eight-year bonds at a coupon of 0.875 percent.

Edited by TSB

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