T-bill yields fall across the board

Treasury bill rates further fell across the board on Tuesday amid the low and stable inflation, allowing the Bureau of the Treasury to raise P22 billion from the short-dated IOUs.

The Treasury awarded P5 billion in the benchmark 91-day debt paper at 1.058 percent, down from 1.079 percent last week.

It also sold P7 billion in 182-day bills at 1.499 percent, down from 1.543 percent during the previous auction.

The Treasury offered only P5 billion of the six-month IOUs, but National Treasurer Rosalia de Leon said they accepted double the noncompetitive bids due to lower rates.

The P10 billion in 364-day securities fetched an annual rate of 1.759 percent, down from 1.791 percent previously.

As such, De Leon said the Treasury opened its tap facility window to sell another P5 billion of the one-year bills to the 11 government securities eligible dealers (GSED)-market makers.

Across the three tenors, tenders totaled P96.7 billion, making the auction 4.8 times oversubscribed.

De Leon attributed the robust demand and declining rates to the benign inflation outlook on top of sustained ample domestic liquidity.

She said it also helped that investors had a bias for the short end of the yield curve.

While the country’s two biggest tax-collection agencies—the bureaus of Customs and of Internal Revenue—have been recently exceeding their downgraded targets and improved their revenue take despite the pandemic-induced recession, De Leon said the Treasury was sticking to its program to borrow a record P3 trillion this year, including a gross of P2.2 trillion from domestic sources, mainly from the sale of bills and bonds. —Ben O. de Vera