T-bill rates continue to decline

Treasury bill rates again fell across the board on Monday despite the report on elevated inflation for January, allowing the Bureau of the Treasury to raise P24 billion from the short-dated debt securities.

The average rate for the benchmark 91-day bills declined to 0.845 percent from 0.846 percent last week while the 182-day paper fetched 1.046 percent, down from 1.094 percent.

Due to the lower rates, National Treasurer Rosalia de Leon said the Treasury accepted double the amount of noncompetitive bids such that P7 billion each were sold in the three- and six-month IOUs.

The Treasury initially offered P5 billion each in the 91- and 182-day securities.

It also fully awarded P10 billion in the 364-day bills at 1.416 percent, down from 1.446 percent previously.

Across the three tenors, tenders totaled P88.6 billion, making the auction four times oversubscribed.

The actual total award exceeded the P20-billion offering.

De Leon said the Treasury opened its tap facility to sell another P5 billion in one-year bills to the 11 government securities eligible dealers as “liquidity continues to overflow.”

“The market sees the spike in prices as temporary with supply constraints and inflation dialing back to the middle of the target next year,” De Leon said.

The Bangko Sentral ng Pilipinas sees headline inflation averaging 4 percent this year. INQ