T-bill rates rise on economic rebound prospects

Domestic treasury bill rates rose across the board on Monday alongside a rise in US yields amid expectations of an economic rebound under the Biden administration through its massive fiscal stimulus to fight COVID-19.

The Bureau of the Treasury awarded P5 billion in the benchmark 91-day bills even as the average rate inched up to 0.875 percent from 0.845 percent last week.

It also sold P5 billion in 182-day IOUs at 1.067 percent, up from 1.046 percent previously.

The annual yield for the P10 billion in 364-day treasury bills also rose to 1.527 percent from 1.416 percent.

National Treasurer Rosalia de Leon attributed the uptick in rates to “correction as US treasuries moved up with bright prospects for President Biden’s stimulus.”

According to reports, US President Biden was pushing for congressional approval of a $1.9-trillion COVID-19 relief bill to support Americans, businesses and industries struggling amid the prolonged pandemic.

In all, the Treasury awarded all P20 billion in bills it offered and also opened its tap facility window to sell another P5 billion in the one-year debt paper to the 11 government securities eligible dealers (GSEDs)-market makers.

Bids across the three tenors totaled P50.1 billion, making the auction more than two times oversubscribed.

The total tenders on Monday were lower compared to previous auctions as De Leon said some investors might be holding back, on wait-and-see or instead snapping up the Bangko Sentral ng Pilipinas’ shorter term deposits.

Despite an ongoing offer of three-year retail treasury bonds, De Leon said the bonds were not in conflict with fund-raising through short-dated bills since they target different segments of the curve. —Ben O. de Vera INQ