T-bill rates continue slide amid COVID-19 jitters

T-bill rates continued to slide down as markets worry about the economic impact of COVID-19 outbreak globally.

But even as investors have been jittery, demand for treasury bills, remained strong. Their short tenors, or periods of maturity, were being considered as safe haven. The Bureau of the Treasury sold all P20 billion in T-bills offered on Monday (Feb. 24).

The Treasury sold P6 billion in the benchmark 91-day debt paper at an average of 3.003 percent, down from 3.072 percent last week.

It also awarded P6 billion in 182-day IOUs at 3.365 percent, down from 3.42 percent.

The longer 364-day T-bills generated P8 billion in sale at an annual rate of 3.787 percent, down from 3.836 percent previously.

Bid rates fell below secondary market yields, and the three T-bill tenors fetched tenders totaling P70.9 billion—making the auction over 3.5 timers oversubscribed.

The Treasury opened its over-the-counter (OTC) facility to sell some more of the 364-day debt paper to government-owned and/or -controlled corporations (GOCCs).

“It’s obvious that liquidity is around,” Deputy Treasurer Erwin D. Sta. Ana told reporters after the auction.

He added that rates were going down amid expectations of another interest rate cut by the Bangko Sentral ng Pilipinas (BSP) in the second quarter of 2020 while tracking declining rates of US treasury securities.

Asked how long the Treasury expected rates to remain low, Sta. Ana replied: “It’s difficult to say at this time how long this would be sustained but, of course, one major factor is the COVID-19 because it affects the global scene.”

“That could actually have an impact on global growth,” Sta. Ana said.

Despite the COVID-19 outbreak, Sta. Ana said planned offshore commercial borrowings—of dollar-denominated global bonds, yen-denominated samurai bonds, as well as renminbi-denominated panda bonds—would push through within the first half of 2020.

Another round of retail treasury bond (RTB) sale may also be in the offing, he said.

Sta. Ana said the first quarterly draw of premyo bonds would be on March 18 with 116 cash prize winners to be known, including one winner for the P1 million top prize and house and lot package in Cavite from the Villar property developer Vista Land.

Edited by TSB