MANILA -- The rates of Philippine Treasury bills (T-bills) declined Monday, prompting National Treasurer Rosalia De Leon to attribute this development to the decision by banks to tap government securities for excess funds.
The Bureau of the Treasury (BTr) offered a total of PHP15 billion worth of debt papers but tenders reached PHP87.1 billion.
It offered the 91-day paper for PHP4 billion but bids reached PHP13.352 billion. The auction committee made a full award.
Rate of this tenor declined to 3.398 percent from 3.769 percent during the auction last July 22.
Rate of the 182-day paper went down to 3.677 percent from 4.100 percent previously.
This tenor was fully awarded at PHP5 billion while bids totaled to PHP27.629 billion.
Rate of the 364-day paper declined to 4.898 percent from 4.519 percent.
This was fully awarded at PHP6 billion while bids amounted to PHP46.149 billion.
De Leon said investors swarmed at the day’s T-bill auction because they now have excess funds following the total implementation of the 200 basis points cut in financial institutions’ reserve requirement ratio (RRR) as of July 26.
Aside from the impact of the RRR cuts, she also cited the drop in T-bill rates to the 25 basis points cut in the Federal Reserve’s key rates last week and expectations for cuts in Asian central banks’ key rates in the near term.
“So (it’s because of) all those confluence of reasons so they are now just parking the funds with the Treasury bills,” she said.
Meanwhile, De Leon said the 92 billion yen multi-year Samurai bond offering of the country last week will be the last overseas borrowing of the Philippine government this year.
Settlement date for the three-, five-, seven-, and 10-year paper is scheduled on August 15, 2019.
The country issued USD850 billion worth of Samurai bond, upsized from the initial plan of USD750 million, to address strong demand from investors, De Leon said.
“Given the order book we have very much exceeded one billion (dollar). That’s also to show our appreciation to the investors because they also lowered in terms of the spreads over the benchmark we’ve seen in the tightness in terms of the rates for the Samurai so we also increased it to another 100 million dollars so that’s about 850 million in yen equivalent,” she said.
De Leon explained that if ever the government needs to raise additional fund this year, it can simply increase domestic borrowing in the last quarter of the year. (PNA)
