Treasury sells P20 billion in T-bills after 2 weeks of excessive rates

After two weeks of rejecting investors’ high bid rates, the Bureau of the Treasury on Monday (April 6) finally sold P20 billion in T-bills.

National Treasurer Rosalia V. de Leon said that rates were already “within internal estimates and secondary levels” even as they rose compared with previously awarded auctions.

She said while the market remained cautious as the COVID-19 lockdown duration was uncertain, investors had to unload liquidity, or cash, gained from the recent cut in banks’ reserve requirement.

The 200-basis points (bps) cut in bank reserves took effect last March 30, releasing about P225 billion into the financial system.

For the benchmark 91-day T-bills, P10 billion was sold at an average rate of 3.413 percent.

Also, P5 billion each in 182- and 364-day debt paper were also awarded at 3.553 percent for 182-day debt paper and 3.845 percent for 364-day papers.

The three-month IOUs were previously issued at 3.024 percent a month ago; six-month debt, 3.398 percent three weeks ago; and one-year government securities, 3.557 percent also three weeks ago.

Across the three tenors, or periods of maturity, tenders totaled P37.675 billion, making the auction almost twice oversubscribed.

Edited by TSB