T-bill rates fell on Monday (April 20) following last week’s surprise but hefty cut in the policy rate, allowing the Bureau of the Treasury to sell P24 billion in government securities or one-fifth more than its offering.
It awarded P7 billion in the benchmark 91-day treasury bills, another P7 billion in 182-day, and P10 billion in 364-day.
The Treasury was supposed to sell only P5 billion each in the three- and six-month tenors on top of P10 billion in one-year debt paper for a total offering of P20 billion.
“We accepted more than offer because of double non-competitive award,” National Treasurer Rosalia V. de Leon said after the auction.
“The auction was nearly four times oversubscribed with total bids reaching P79.9 billion, prompting the committee to raise the accepted non-competitive bids for the 91- and 182-day securities,” the Treasury said in a separate statement.
The volume of one-year IOUs, meanwhile, doubled from only P5 billion last week as “previous auctions saw strong appetite for yield pick-up and incremental liquidity from P120-billion maturity” of bonds, De Leon said.
De Leon attributed the “significant drop” in T-bill rates to the Bangko Sentral ng Pilipinas’ (BSP) off-cycle 50-basis points interest rate cut last week, bringing the policy rate to 2.75 percent.
The 91-day Treasury bill fetched an average rate of 3.113 percent, down from 3.471 percent last week.
The 182-day rate declined to 3.239 percent from 3.409 percent previously, while the annual rate for the 364-day dropped to 3.295 percent from 3.685 percent.
Due to strong demand of one-year T-bills, the Treasury opened its tap facility window to sell another P10 billion.