Liquid market parks funds in attractive T-bills

The Bureau of the Treasury on Monday sold P20 billion in T-bills amid robust demand.

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. The Treasury still awarded all P8 billion it offered.

Tenders across the three tenors totaled P49.3 billion, making the auction almost 2.5 times oversubscribed.

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 toward the short end of the curve even as the headline inflation rate was expected to have leaped higher in January.

She noted, for example, the brisk sales in three-year retail treasury bonds, which has so far attracted P200 billion.

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

De Leon said their 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 as more debts matured and as banks’ reserve requirement ratio was reduced.

She added 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 in previous 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 [monitor] the market … because we still have to grapple with the issue of the [2019 novel coronavirus].” INQ