T-bills down across-the-board

MANILA, Philippines - Government debt papers yesterday fetched lower yields amid expectations the Bangko Sentral ng Pilipinas will keep key policy rates steady when it meets this month.

National Treasurer Rosalia de Leon told reporters yesterday the lower yields during the Treasury bills auction was due to the recent credit rating upgrade received by the country from Standard & Poor’s and the lower-than-expected first quarter economic growth of 5.7 percent.

“They (the market) also don’t expect the central bank would increase their rates. That’s the thinking, that maybe there would be a pause (before it starts hiking key rates),” De Leon said.

The Bureau of Treasury yesterday accepted bids for the 91-day T-bills with tenders amounting to P29.286 billion or more than three times the P8 billion on offer. The yield averaged 1.035 percent, down from 1.346 percent in the previous auction.

Bids for the 182-day T-bills, meanwhile, reached P16.21 billion or almost thrice the programmed P6 billion offer. Yields on said paper averaged 1.481 percent, lower than the 1.696 in the previous auction.

Yields for the one-year paper also fell to 1.754 percent during yesterday’s auction from 1.972 percent. The government received tenders amounting to P16.91 billion, which was almost three times the P6-billion offer.

The government has programmed a P135-billion worth of debt paper issuance to local lenders in the second quarter. The bulk or P75 billion will be raised through the sale of short-tenored Treasury bonds (T-bonds), while the remaining P60 billion will come from the issuance of T-bills.

De Leon said that the government continuously looks at its liability management options although she stressed no decision has yet been made on changing the current borrowing plan.

“We’re oozing with cash. We want to make sure we’re maximizing our savings on interest payments,” De Leon said.