Treasury sells all P20-B in T-bills offered at Feb. 3 auction

The Bureau of the Treasury on Monday sold P20 billion in T-bills amid robust demand and despite a slight increase in the rate of the one-year debt paper.

The P6 billion in benchmark 91-day treasury bills fetched an average rate of 3.187 percent, down from 3.297 percent last week.

The Treasury also awarded P6 billion in 182-day IOUs at 3.523 percent, down from 3.597 percent previously.

The 364-day tenor was sold at 3.964 percent, just slightly up from 3.963 percent last week, allowing the Treasury to award all P8 billion it offered.

Tenders across the three tenors, or maturity periods, totalled P49.3 billion, making the auction almost 2.5 times oversubscribed its P20-billion offering.

In an interview with reporters after the auction, National Treasurer Rosalia V. de Leon attributed the full award to “very strong liquidity” in the onshore market.

De Leon said investors have been moving to the short end of the curve even as the headline inflation rate was expected to be slightly up in January.

She noted that in the case of the ongoing sale of three-year retail treasury bonds (RTBs), a total of over P200 billion were already generated as new money and from the switch offer, with around three-fourths of the volume coming from new small investors.

The government’s 23rd overall and the Duterte administration’s sixth RTB issuance will end of Thursday. The bonds maturing on Feb. 11, 2023 were being sold at a coupon of 4.375 percent.

De Leon said the latest RTB offering was on track to breach the record P255.4 billion sold in 2017, noting that about P590 billion were freed into the system late last year by maturing debt as well as the reduction in banks’ reserve requirement ratio (RRR).

She added that loan growth had been stable while recent corporate bond issuances were not “chunky.”

The RTBs would also offset some “huge” rejections made by the Treasury during recent auctions, she said.

As for offshore commercial borrowings, De Leon said the dollar-denominated global bonds and the yen-denominated samurai bonds were still on the table.

For the renminbi-denominated panda bonds, De Leon said “we’ll have to see the market especially because right now we still have to grapple with the issue of nCoV” or the novel coronavirus spreading inside and outside China.

“Not only for the panda but for all the markets, we still have to be very vigilant and watch out for developments, in terms of if it would be very cost-efficient and -effective for our funding exercise,” she said.

Edited by TSB