Treasury upsizes T-bill award to P21 billion

MANILA, Philippines — The government upsized the award of short-dated securities in yesterday’s auction to P21 billion to take advantage of lower rates and robust demand.

The Bureau of the Treasury (BTr) raised the volume of Treasury bills (T-bills) from the initial offer of P15 billion.

Yesterday’s auction was more than  five times oversubscribed with total bids of P87.2 billion, prompting the auction committee to double the accepted non-competitive bids across all tenors.

With the upsized award, the BTr will no longer open the tap facility that grants eligible government securities dealers access to the securities at auction rates.

The average rates for the 91-day, 182-day and 364-day T-bills settled at 1.235 percent, 1.472 percent, and 1.723 percent, respectively. These rates are all lower than the previous auction and secondary benchmark rates.

National Treasurer Rosalia de Leon said investors flocked to the “small supply” of short-dated government securities, raising demand and giving the government the leeway to borrow at lower rates.

The BTr is raising P215 billion from the bond market in June to take advantage of the ample liquidity in the system and sustained demand for safe and higher-yielding assets.

The borrowing program for next month was ramped up from the P170 billion programmed in April and May and P160 billion in March.

The Treasury raised the volume of bonds with longer maturities in the tenor mix after seeing robust demand for such in the previous auctions.

To be auctioned every Monday are P15 billion worth of short-term debt papers for a total of P75 billion for the whole month.

These weekly Treasury bill offers will be composed of P5 billion each for those with tenors of 91 days, 182 days, and P364 days.

To be offered every Tuesday, meanwhile are P140 billion worth of Treasury bonds in total at P35 billion each for tenors of 20 years, seven years, 10 years, and five years.