Strong demand pulls down T-bill rates
Treasury bill rates declined across-the-board on Monday amid strong demand for short-dated debt and expectations that monetary authorities will keep the policy rate at a record-low 2 percent.
The Bureau of the Treasury sold all P15 billion of the IOUs it offered—P5 billion each for the three tenors.
The benchmark 91-day treasury bill was awarded at an average rate of 1.07 percent, down from 1.079 percent last week.
The Treasury sold 182-day T-bills at 1.389 percent, down from 1.402 percent previously.
The 364-day securities fetched an annual rate of 1.597 percent, down from 1.604 percent.
National Treasurer Rosalia de Leon said the “marginal” decline in rates was due to the likelihood that the Bangko Sentral ng Pilipinas (BSP) will maintain key interest rates steady when the Monetary Board decides on the policy stance on Thursday.
In a report on Monday, think tank Moody’s Analytics said it expected the BSP to keep monetary policy settings on hold for the rest of this year, as these remain “firmly in accommodative territory” just like in Indonesia and Japan, whose central banks will also meet this week.
“The Philippines and Indonesia continue to battle domestic infection waves that have disrupted their respective recoveries,” Moody’s Analytics noted.
Across the three T-bill tenors, investors tendered a total of P72.5 billion, making the auction nearly five times oversubscribed.
De Leon said demand also came on the back of P20 billion worth of debt paper maturities, which freed liquidity back to investors.
—Ben O. de Vera INQ
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