35-day T-bill rate hits record low

The Bureau of the Treasury on Tuesday sold P15 billion in 35-day bills at 1.684 percent, the lowest-ever rate for the short-dated securities revived at the height of the COVID-19 lockdown.

Tuesday’s auction generated P62.5 billion in bids, making it more than four times oversubscribed.

National Treasurer Rosalia V. de Leon attributed the strong demand to the Bangko Sentral ng Pilipinas’ surprise and hefty 50-basis-point cut in the key policy rate to a record-low 2.25 percent last week.

In turn—and just like the longer T-bills offered last Monday, the average rate for the five-week IOUs maturing on Aug. 5 fell below the 2-percent mark for the first time since this tenor was again offered in April. Some P34 billion in 35-day bills are outstanding to date, the Treasury said in a statement.

Despite the robust tenders, De Leon said the Treasury did not upsize its offering through the tap facility window due to the debt paper’s “very short tenor.”

On Monday, the Treasury sold another P10 billion in 364-day bills via tap.

T-bill rates fell below 2 percent on Monday following the BSP rate cut last week that sent investors flocking to the auction of government securities.

As the financial system remained liquid, De Leon also said that selling retail treasury bonds (RTBs) was “always an option for us to raise funding and for small investors to deploy funds in supporting government priorities at this time, particularly in the battle against COVID-19.”

In February, the Treasury issued to small investors a record P310.8 billion in three-year RTBs at a coupon of 4.375 percent. INQ