T-bills demand strong despite MECQ risks to economy

MANILA, Philippines — Investors snapped up P20 billion in treasury bills at rates that fell across-the-board on Monday as oozing domestic liquidity outweighed any sentiment on the return of Metro Manila and neighboring provinces to more stringent COVID-19 lockdown.

The Bureau of the Treasury sold P5 billion in the benchmark 91-day T-bills at 1.221 percent, down from 1.335 percent last week.

It awarded another P5 billion in 182-day debt paper at an average rate of 1.454 percent, down from 1.605 percent during the previous auction.

The P10 billion in 364-day IOUs fetched an annual rate of 1.749 percent, down from 1.758 percent previously.

In all, the three tenors attracted tenders totaling P76.4 billion, making the auction almost four times oversubscribed.

National Treasurer Rosalia V. de Leon said the Treasury opened its tap facility window to sell another P5 billion of the one-year securities.

De Leon said President Duterte’s decision to place Metro Manila, Bulacan, Cavite, Laguna and Rizal under modified enhanced community quarantine (MECQ) on Aug. 4-18 amid rising COVID-19 cases had no impact on demand for government securities.

According to de Leon, surplus liquidity and preference for safe-haven assets resulted in overwhelming subscription and continued fall in rates during Monday’s auction.

Earlier on Monday, Finance Secretary Carlos G. Dominguez III said bringing back the areas which accounted for over two-thirds of the economy to tighter lockdown would slow economic recovery even as the 15-day MECQ should also slow down COVID-19’s spread.

JE