MANILA -- Rates of the Philippines’ Treasury bills (T-bills) declined across-the-board Monday, which National Treasurer Rosalia De Leon pointed to high liquidity situation given the cuts in banks’ reserve requirement ratio (RRR).
Rate of the bellwether 91-day paper went down to 3.883 percent from 4.385 percent during the auction last June 25.
The Bureau of the Treasury (BTr) offered it for PHP4 billion and the auction committee made a full award after bids reached PHP10.37 billion.
Rate of the 182-day T-bill declined to 4.238 percent from 4.723 percent in the previous auction.
It was fully awarded at PHP5 billion while total tenders amounted to PHP19.15 billion.
Average rate of the one-year paper went down to 4.736 percent from 4.986 percent in the previous auction.
The auction committee also made a full award for this tenor at PHP6 billion while bids were more than three times at PHP21.01 billion.
De Leon dubbed as “excellent” the turn-out of bids during the auction, which she also traced to increased demand due to lower supply.
BTr cut is borrowing program for the third quarter of the year to PHP230 billion from PHP300 billion from the previous quarter due to lower disbursement in the first half of the year because of the delay in the proposed 2019 national budget.
De Leon also cited expectations for more cuts in the Bangko Sentral ng Pilipinas’ (BSP) as another factor for the increased demand for the government debt paper given the drop in inflation rate for June to 2.7 percent from an uptick to 3.2 percent last May.
Prospects for a cut in the Federal Reserve rates also played a part in investors’ demand for the debt paper, she said.
There are also PHP19 billion worth of maturing government securities this week thus, investors will have additional liquidity that made them more aggressive to bid during the T-bill auction, she said.
Meanwhile, De Leon said they are still finalizing the details of the planned yen-denominated Samurai bond issuance, which are seen to be in three tenors.
Volume, tenors and pricing will depend on market sounding, which officials continue to study, she added. (PNA)
