Treasury sells P 23.2B in T-bills

The Bureau of the Treasury on Monday sold P23.2 billion in bills, exceeding the P20-billion total offering due to strong demand for one-year debt paper.

The Treasury awarded P6 billion in the benchmark 91-day IOUs at 3.013 percent, slightly up from 3.003 percent last week.

It also sold P6 billion in 182-day debt notes at 3.324 percent, down from 3.365 percent previously.

For the 364-day bills, P11.2 billion were awarded at an annual rate of 3.684 percent (down from 3.787 percent) as the Treasury accepted P6.4 billion in noncompetitive bids—double the usual P3.2 billion for the weekly P8-billion offering.

While the average rate of the 91-day bills inched up, all three tenors were sold with rates below those in the secondary market, National Treasurer Rosalia V. de Leon told reporters after the auction.

Bids totaled P60.4 billion, making the auction more than three times oversubscribed.

De Leon partly attributed the robust demand for short-dated securities to the lingering adverse impact of the COVID-19 outbreak, which has caused global interest rates to decline.

Also, De Leon pointed to market expectations of interest rate cuts beyond the 50 basis points earlier announced by Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno in order to further support and stimulate the economy amid the spread of COVID-19 in and out of China—an accommodative monetary policy stance that provided a push to the market.

Another reason for the strong demand for treasury bills was the “still enough” liquidity in the financial system, De Leon added.

It helps that the government will source the bulk or 75 percent of its borrowings locally, while the Treasury remains on wait-and-see as far as its planned offshore bond issuances were concerned, according to De Leon. —Ben O. de Vera