91-day T-bill rate falls to 0.986%

MANILA, Philippines — T-bill rates further fell across-the-board on Monday, with the yield for the benchmark 91-day dropping below 1 percent alongside the country’s record-low policy rate.

The Treasury awarded all P5 billion in the three-month debt paper it offered at 0.986 percent, down from 1.019 percent last week.

National Treasurer Rosalia V. de Leon said the Treasury expects rates of short-dated securities to “trend downward,” fueled by investors’ bias for the front end amid high domestic liquidity volume.

Last week, the Bangko Sentral ng Pilipinas (BSP) made a surprise 25-basis point (bp) cut in the policy rate to 2 percent in a bid to support the economy following a worse-than-expected contraction during the third quarter despite gradually easing quarantine restrictions.

The rate fetched by the P5 billion in 182-day IOUs also declined to 1.385 percent from 1.443 percent previously.

As for the P10 billion in 364-day treasury bills, the annual rate of 1.695 percent was lower than the 1.745 percent during the previous auction.

All of the awarded rates were likewise below those in the secondary market, the Treasury said in a statement.

Across the three tenors, tenders totaled P73.4 billion, making the auction 3.7 times oversubscribed.

On top of fully awarding its T-bills offering to raise P20 billion, the Treasury opened its tap facility window to sell another P5 billion in one-year debt to the 11 government securities eligible dealers (GSEDs)-market makers.

De Leon said the Treasury will release this week its schedule of T-bill and bond auctions for December, as the government was sourcing the bulk of this year’s borrowings from the domestic market on the back of robust demand and low interest rates.