Treasury partially awards T-bills

MANILA, Philippines — The government partially awarded P6.7 billion in short-term securities, with demand slowly picking up after six weeks as investors park their funds in the meantime.

Rates across the board continue to pick up, which prompted the Bureau of the Treasury to just partially award offers for three, six, and 12 month tenors of T-bills, the last for the month of October.

Still, this is the 10th straight T-bills auction that the Treasury failed to raise its intended amount of P15 billion.

Nonetheless, this week’s auction result was an improvement from last week’s T-bills on offer, where the government rejected all bids and did not raise any amount.

Rates across the board were higher than secondary markets, but lower than the previous auction for all tenors.

Rates for the 91-day T-bills rose by 66.5 basis points to 4.22 percent. This is a slight downtrend from last week’s rate of 4.82 percent, but still above the secondary rate of 3.555 percent.

The Treasury only awarded P2.505 out of the P5 billion for the 91-day T-bills.

The 182-day short-dated debt papers also saw rates pick up by 27.1 basis points to 4.65 percent, from the reference rate of 4.379 percent, but down from last week’s 5.226 percent.

Bids accepted for the three-month tenor totaled P2.1 billion out of the P5 billion target.
The Treasury also made a partial award for the 364-day T-bills even after rates averaged 4.875 percent, soaring by almost 100 basis points.

Overall demand for the short-term securities improved 28 percent week-on-week.

Total bids reached P20.86 billion, oversubscribing the auction by 1.39 times.

It should be noted that total tenders in the past weeks were below P20 billion until yesterday.

National treasurer Rosalia de Leon said “banks needed to place funds.”

By tenor, bids across the board also increased to P8.3 billion, P7.466 billion, and P5.094 billion for three, six, and 12 month tenors, respectively.

For this month, the Treasury aims to borrow P200 billion from domestic creditors.

Of this, P60 billion is expected to come from short-dated T-bills. Just 18 percent of the program or P10.62 billion was raised for T-bills.