The Bureau of the Treasury (BTr) got everything it wanted from the market on Monday, when it sold all P15 billion worth of Treasury bills (T-bills) at the auction of government securities where, except for the six-month tenor, the rates showed marginal declines.
According to National Treasurer Rosalia V. de Leon, market appetite for the 91- and 364-day T-bills proved strong even as banks and trust entities were willing to cede the usual premium and bid rates at a discount to earlier exercises.
“We made a full award on the three short-term tenor buckets [and] we see healthy demand on the short end of the [yield] curve. Except for the 182-day, we’ve also seen marginal declines in rates the banks offered. So these really indicate there is still demand on the short end,” de Leon told financial reporters.
The 91-day T-bills were sold in full at P6 billion, with tenders reaching P16.196 billion that forced the auction committee to reject P10.196 billion. Its rate fell by 1.5 basis points to 2.161 percent, from 2.176 percent in the previous auction.
The 364-day T-bill was also awarded in the full aggregate amount of P4 billion and was met by offers amounting to P9.917 billion that forced the BTr to reject P5.917 billion. The average rate for the IOU also contracted by 2.6 basis points to only 2.946 percent from 2.972 percent.
De Leon also noted the increasing tension between South Korea and North Korea that, in the end, failed to dampen “the very high liquid tone of the market”.
According to her, the Central Bank governor ruled out a free-falling peso whose value at the local currencies market weakened to an 11-year low.
“The free fall of the peso is really more a knee-jerk reaction given the geopolitical tensions between North Korea and the US,” she said.
The 182-day T-bill posted a 4.8 basis point increase to 2.577 percent, from only 2.529 percent, when it was last sold weeks earlier. Bids for the six-month tenor aggregated P6.179 billion and the market’s appetite for it allowed the auction committee to sell all P5 billion.
De Leon said inflation continues to be very benign across the Philippines and that its macroeconomic base remains one of the strongest in this part of the region.
Recently, Secretary [Ernesto] Pernia announced that the GDP would be on the higher end of the range. I think these are really very solid fundamentals coming out of the Philippines so we still enjoy strong investor confidence in the economy,” she said.
Bids aggregated P32.3 billion, or twice oversubscribed compared to the P15 billion, on offer, of which P16.2 billion or 50 percent, were for the 91-day security alone.