T-bill rates slide further as investors seek safe haven

T-bills rates further slid on Monday (May 18) as the Bureau of Treasury sold P24 billion or 1/5 more than it offered as investors sought safe haven for their money amid the COVID-19 pandemic.

The Treasury awarded P7 billion—more than the P5-billion offering—in the benchmark 91-day debt paper at an average rate of 2.09 percent, down from 2.269 percent last week.

It sold another P7 billion in 182-day treasury bills—also exceeding the P5-billion offer—at 2.193 percent, down from 2.374 percent previously.

The P10-billion in 364-day IOUs fetched an annual rate of 2.653 percent, down from 2.761 percent.

Across the three tenors or maturity periods, tenders totalled P103.8 billion, making the auction over five times oversubscribed compared with the P20-billion total offering.

“Strong reception to T-bill auction at much lower rates reflecting liquid tone of market aftermath of supportive actions of the BSP,” National Treasurer Rosalia V. de Leon said, referring to the Bangko Sentral ng Pilipinas’ recent cuts in key interest rates and bank reserves to unleash more liquidity into the financial system.

“Flight to safety continues,” De Leon added, as government securities were being considered by most investors as a safer bet with or without the COVID-19 crisis.

De Leon said the Treasury will sell another P5 billion in one-year T-bills to its 11 accredited dealers.

Edited by TSB