National Treasurer Rosalia de Leon / INQUIRER FILE PHOTO
As Luzon and other parts of the country entered the third week of the one-month COVID-19 quarantine, bid rates for treasury bills further climbed on Monday, prompting rejection by the Bureau of the Treasury.
“All bids are over the roof. I heard banks are giving out ultra-high deposit rates,” National Treasurer Rosalia V. de Leon said after the auction.
“Average bids for the 91-, 182- and 364-day bills increased to 4.517 percent, 4.259 percent and 4.402 percent, respectively, markedly higher compared with previous auction and prevailing market rates,” the Treasury said in a statement.
The first Treasury auction for second-quarter domestic borrowings was also undersubscribed as tenders across the three tenors totaled only P17.2 billion for the P20-billion offering.
De Leon said she was nonetheless optimistic that the P15 billion in 35-day bills to be auctioned on Tuesday “should be appealing and put their [investors’] money to work.”
De Leon pointed out that the five-week IOUs, which were last offered in 2004, have “very short maturity so funds will be available when needed,” adding that there was still opportunity cost for holding to cash.
As for offshore commercial borrowings, De Leon last week said that the Treasury was “watching the US-dollar market closely, especially after bazooka interventions,” referring to President Donald Trump’s $2-trillion stimulus package to save the US economy amid the COVID-19 pandemic.
Meanwhile, De Leon said the Bangko Sentral ng Pilipinas’ (BSP) repurchase of P300 billion in government securities from the Treasury pushed through on Monday, fetching a “revenue-neutral” rate, without elaborating.
Also, De Leon welcomed Governor Benjamin E. Diokno’s pronouncement last Sunday that the BSP could inject more money beyond P300 billion. “We appreciate the governor’s statement and will certainly keep it in mind,” she said.
Since last week, the Treasury fully rejected bids for a total of P70 billion in government securities as “cash remains king” amid the one-month lockdown. INQ