Treasury sells P30B T-bonds amid ‘oozing’ liquidity

MANILA, Philippines — Amid “oozing” liquidity, the Bureau of the Treasury on Tuesday sold all P30 billion in T-bonds and offered another P15 billion through its tap facility.

The reissued 10-year treasury bonds were awarded at an average rate of 4.409 percent, aligned with secondary market rates.

Tenders reached P83.5 billion, making the auction over 2.5 times oversubscribed.

National Treasurer Rosalia V. de Leon told reporters after the auction that the strong demand for long-dated securities came on the back of investor concerns over the COVID-19 outbreak, the market’s anticipation of another interest rate cut, and an “oozing” liquidity in the financial system.

“Liquidity remains even after our RTB [retail treasury bond issuance] and auctions. Even when we siphoned some of the liquidity with the RTB, it will also be plowed back to the market given that it will be dispersed in the form of infrastructure, payments of account payables of agencies—there’s unwinding also because it’s going back to the market,” De Leon said.

Given the substantial bids during the auction, de Leon was hopeful that the over-the-counter tap offering will cater to institutional investors such as pension funds as it had been a while since the Treasury issued a long T-bond tenor.

“This would also match their asset-liability management,” she noted.

To date, this treasury bond series maturing on Jan. 10, 2029 had an outstanding volume of P170 billion.

The latest Treasury data showed that the amount of outstanding IOUs sold by the national government as of January amounted P5.1 trillion.

Outstanding treasury bills reached P483.5 billion, of which P105.5 billion were from the auction of the benchmark 91-day IOUs; P128.5 billion from 182-day debt paper; and P249.6 billion from 364-day T-bills.

Meanwhile, P4.6 trillion in treasury bonds were outstanding at end-January.

Three-year IOUs have a face amount of P153.5 billion; five-year debt paper, P291.5 billion; seven-year T-bonds, P460.7 billion; and 10-year treasury bonds, P507.3 billion.

The outstanding amount for 10-year agrarian reform bonds was P8.7 billion; 20-year IOUs, P420.3 billion; and 25-year debt paper, P235.9 billion.

Of the $6.582-million Philippine Par Bond redenominated into 28.5 years, the outstanding amount was P97.1 million.

Also outstanding were P1.6 trillion in retail treasury bonds (RTBs); P909.3-billion benchmark bonds; P50 billion in 25-year CB-BoL T-bonds; P25.4-billion onshore dollar T-bond; and P4.9 billion in “premyo” bonds.

Edited by MUF