T-bill interest rates ease across all tenors

Rosalia de Leon

Treasury bill rates again went down across the board on Monday as investors sought short-term IOUs amid easing oil prices, allowing the government to raise more funds than planned.

The T-bills remained oversubscribed, with the Bureau of the Treasury (BTr) awarding fully for the second time since the Russia-Ukraine war broke out.

The bellwether 91-day T-bill rate eased by 13 basis points to average at 1.25 percent.

Average rate on the 182-day bill also decreased by 22.6 basis points to 1.555 percent, while average 364-day rate fell by 32.6 basis points to 1.857 percent.

The BTr raised a total of P19 billion, or P4 billion more than intended.

Short-term appetite

National Treasurer Rosalia de Leon told reporters that the auction results had been influenced by bids being lower than those made in previous auctions.

“Markets flocked to short-term instruments as crude oil prices eased with the release of reserves from stockpiles,” de Leon said. “Maturities also added support for reinvestment.”

Investors tendered a total of P71.25 billion or almost five times the total offered volume.

For the benchmark bill alone, tenders reached P32.73 billion, more than thrice the P5-billion offer.

Lenders made available P27.5 billion for the 182-day bill and P11.02 billion for the 364-day paper—respectively more than five times and twice the offers.

The auction committee doubled the volume of accepted non-competitive tenders, allowing for an extra P2 billion in awards for each of the 91-day and 182-day bills.

National Treasurer Rosalia de Leon told reporters that Monday’s results were influenced by bids being lower than those made in previous auctions

“Markets flocked to short-term instruments as crude oil prices eased with the release of reserves from stockpiles,” de Leon said. “Maturities also added support for reinvestment.”

Earlier, First Metro Investment Corp. and the University of Asia and the Pacific said in a joint commentary that longer tenor bonds may not be so attractive for ordinary investors during this second quarter.

This was based on the project that inflation was likely to hit 5 percent by May, driven by an unabated surge in crude oil and key commodity prices as well as expectations that the United States Federal Reserve will accelerate its policy rate hikes.

“With the Russia-Ukraine conflict on the balance and the extremely elevated crude oil prices spilling over into prices of other goods and services, the investors stance appears justified,” they said.

“An end of the conflict and sanctions, possibly in the third quarter or later, would help turn the bond markets around,” they added.

—RONNEL W. DOMINGO INQ