Treasury awards P20 billion in T-bills

MANILA, Philippines — The Bureau of the Treasury on Monday awarded all P20 billion in T-bills it offered amid a market flushed with liquidity despite lingering uncertainty on the upcoming quarantine setup for Metro Manila and other areas that still have high COVID-19 cases.

The Treasury sold P5 billion in the benchmark 91-day debt paper at an average rate of 2.035 percent, down from 2.038 percent last week.

It also awarded P5 billion in 182-day IOUs at 2.101 percent, up from 2.099 percent during the previous auction.

As for the 364-day treasury bills, P10 billion were sold at an annual rate of 2.35 percent, down from 2.378 percent previously.

National Treasurer Rosalia V. de Leon said the average rates tracked inflation, which averaged 2.5 percent at end-May.

Across the three tenors, bids totaled P81.9 billion, making the auction over four times oversubscribed.

De Leon attributed the full award of T-bills to “strong liquidity” while “rates remain subdued.”

But de Leon said investors await the decision on quarantine measures, as President Duterte was expected to announce on Monday night if the government will keep, ease or again tighten the COVID-19 containment in Metro Manila and Cebu as cases remain relatively higher compared to other parts of the country.

De Leon said the Treasury will try to sell another P10 billion of the one-year securities through its tap facility window.

Amid robust demand for government securities as investors sought safe havens for their money, the amount of outstanding IOUs issued by the Treasury locally further rose to P5.7 trillion in May from P5.6 trillion last April.

Outstanding T-bills continued to climb, amounting to P720.2 billion last month from P644.7 billion in April; meanwhile, treasury bonds rose to P5 trillion from P4.9 trillion a month ago.

While the Philippines will borrow more to finance higher public spending and better respond to the health and socioeconomic crises caused by the COVID-19 pandemic, officials had told the Inquirer that domestic debt would account for the bulk or about three-fourths of yearly borrowings.

/MUF