35-day T-bill rate up as investors prefer longer-term IOUs

In a sign that more investors now preferred to place their bets on longer securities, the rate of 35-day treasury bills climbed a few notches to 2.065 percent on Tuesday (June 2).

The Bureau of the Treasury fully awarded P15 billion of the five-week IOUs maturing on July 8.

But the average rate increased from 2.024 percent when the same tenor was sold two weeks ago.

National Treasurer Rosalia V. de Leon explained that rates were expected to be “within vicinity of inflation.”

Headline inflation averaged 2.6 percent at end-April. Last month’s inflation rate will be released by the Philippine Statistics Authority (PSA) on Friday, June 5.

“We now see appetite for intermediate part of the curve,” De Leon added.

Even as the auction attracted P34.39 billion in bids or double the offering, De Leon said the Treasury did not open the tap facility window for the returning 35-day IOUs.

Amid the COVID-19 lockdown in April, the Treasury resumed selling this shortest tenor which was last issued in 2004.

Last Monday (June 1), the Treasury accepted an additional P10-billion worth of 364-day T-bills via tap to its 11 accredited securities sellers.

Tenders for Monday’s tap offer reached P28.6 billion.

Edited by TSB