T-bills sold out, but rates fall amid skimpy inflation

At least P20 billion in T-bills offered by the Bureau of Treasury were sold out on Monday, Oct. 7, as rates fell across the board amid easing inflation.

The Treasury awarded P8 billion in benchmark 91-day debt papers at 2.995 percent, down 4.2 basis points (bps)  from 3.037 percent previously.

It also sold P6 billion in 182-day treasury bills at 3.171 percent, down 24.9 bps from 3.42 percent last month.

As for the 364-day T-bills, P6 billion were awarded at 3.577 percent, down 8.9 bps from 3.666 percent during the previous auction.

In a statement, the treasury said the T-bill rates were also below secondary market yields.

Tenders in three tenors, or duration of maturity, reached P41.7 billion, more than twice the offering, amid “strong demand,” the treasury said.

National Treasurer Rosalia V. de Leon told reporters after the auction that the lower rates came in the wake of another reduction in banks’ reserve requirement, or amount of cash on hand, by the Bangko Sentral ng Pilipinas (BSP).

Inflation was a squeak in September, registering just 0.9 percent. Projections of lower inflation in October further pulled rates down, said De Leon.

The market was also anticipating another rate cut by the US Federal Reserve as data showed a slumping manufacturing sector and slower job creation./TSB