T-bill rates continue slide amid COVID-19 jitters

Treasury bill rates continued to decline as markets worry about the economic impact of the COVID-19 outbreak globally.

Despite the jitters, however, demand for T-bills remained strong such that the Bureau of the Treasury sold all the P20 billion it offered on Monday.

The Treasury sold P6 billion worth of 91-day T-bills 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.

As for the 364-day treasury bills, P8 billion were issued at 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 times oversubscribed.

The Treasury opened its over-the-counter facility to sell more of the 364-day debt paper to government-owned and -controlled corporations.

“It’s obvious that liquidity is around,” Deputy Treasurer Erwin Sta. Ana said, adding that rates were going down amid expectations of another interest rate cut by the Bangko Sentral ng Pilipinas in the second quarter.Asked how long the Treasury expects rates to remain low, Sta. Ana replied: “It’s difficult to say at this time but, of course, one major factor is the COVID-19 because it affects the global scene … and that could impact on global growth.”Despite the coronavirus outbreak, Sta. Ana said the planned offshore commercial borrowings—of dollar-denominated global bonds, yen-denominated samurai bonds and renminbi-denominated panda bonds—would still push through within the first half of the year.

Another round of retail treasury bond sale may also be done by the second semester, he added. INQ