Cash-abundant banks park more funds in T-bills

Rosalia de Leon

The Bureau of the Treasury raised P25 billion from the T-bills offered Monday even as bid rates for the benchmark 91-day continued to rise.

The Treasury awarded P5 billion in the three-month debt paper at an average rate of 1.369 percent, up from 1.349 percent last week.

It also sold P8 billion in 182-day treasury bills at 1.714 percent, which inched up from last week’s 1.713 percent.

The rate for the P12 billion in 364-day IOUs, meanwhile, further declined to 1.88 percent from 1.884 percent previously.

National Treasurer Rosalia de Leon said domestic rates were tracking US treasuries, “which have been creeping down.”

De Leon also noted local T-bill rates were aligned with secondary market benchmarks.

The auction was nearly thrice oversubscribed as investors tendered a total of P71.6 billion across the three tenors.

De Leon said the full award came on the back of robust liquidity, with P70 billion in maturing debt paper this week that investors were expected to “recycle” or spend to buy more government securities due to their preference for “safe assets.”

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

The Treasury would release its auction schedule for May on Wednesday, De Leon said, adding that next month’s borrowing program was shaping up to look like this month’s, which had bigger offerings per auction compared to previous months.

De Leon had said this month’s larger borrowings were “taking advantage of good liquidity conditions.”

For 2021, the government had programmed P3.03 trillion in gross borrowings, of which the bulk or P2.58 trillion would be borrowed locally through the sale of treasury bills and bonds.