BENCHMARK Treasury bill (T-bill) rates further slid during Monday’s auction but six-month and one-year debt papers have already showed signs of correction.

The 91-day debt paper, the benchmark of banks when pricing their loans, fetched a rate of 0.568 percent, or 11.2 basis points lower than the last auction two weeks ago.

The rate was the lowest since government began auctioning off the debt papers to the domestic market. Tenders for the said papers reached P6.43 billion, or more than four times oversubscribed. As a result, the government awarded P2.1 billion from the intended auction of P1.5 billion. 

At the secondary market, the done deal for 91-day paper was at 0.725 percent.

“The bids [for the short-term paper] bids come from foreign inflows, which would be invested eventually to longer tenor securities,” National Treasurer Roberto Tan said following the auction.

“I don’t mind if the rate for the three-month notes further drop,” he added.

Meanwhile, yield for the 182-day debt paper increased by 5.2 basis points to .95 percent but still lower than the secondary market rates of 1 percent. 

Volume for the six-month paper was two times oversubscribed to P6.65 billion.  The government made a full award of P3.5 billion. 

For the one-year paper, on the other hand, it fetched a rate of 2.032 percent, or 6.4 basis points higher when the said debt paper was offered last month. The said rate, however, was slightly higher than the secondary market rate of 2 percent. 

The increasing yield for the two tenors was a sign that the rates were “adjusting normally,” according to Tan. 

Tan attributed the generally positive auction turnout to the Federal Reserve’s pronouncement to maintain a neutral stance on its policy rates. “That Federal Reserve decision would significantly impact the policy rate of the
Bangko Sentral ng Pilipinas this coming Thursday,” Tan said. 

He added that investors have more positive outlook after the government incurred a much lower budget deficit during the first quarter, which was only P26.19 billion versus the P112 billion budget shortfall programmed for the period. 

“We would like to meet our expenditure program to shore up economic activities in the country and spend for poverty alleviation programs and other key projects that are necessary for our economic advancement,” Tan said. 

Total maturing debt for the week was at P2.5 billion, composed mostly of 182-day T-bills.