BTr ups T-bill award as rates drop across the board

THE GOVERNMENT upsized its award of the Treasury bills (T-bills) it offered on Monday as yields dropped across the board on the back of robust investor appetite for short-term debt and expectations of further monetary easing here and in the United States.

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The Bureau of the Treasury (BTr) raised P28.4 billion from the T-bills it auctioned off, higher than the P25-billion plan, with the offer more than four times oversubscribed as total bids reached P103.45 billion. This was higher than the P92.163 billion in tenders recorded on July 21.

The Auction Committee hiked the awarded T-bill volume as all tenors fetched average rates that were lower than those quoted at the previous auction as well as prevailing secondary market yields, the BTr said in a statement.

Broken down, the Treasury borrowed P7 billion as planned via the 91-day T-bills as total tenders for the tenor reached P37.74 billion. The three-month paper was quoted at an average rate of 5.388%, down by 3.4 basis points (bps) from the 5.422% seen in the previous auction. The BTr only accepted bids with this yield.

Meanwhile, the government raised P11.9 billion from the 182-day securities, higher than the P8.5-billion program, as bids amounted to P36.74 billion. The strong demand prompted the BTr to double its acceptance of noncompetitive bids for the tenor to P6.8 billion, it said.

The average rate of the six-month T-bill was at 5.543%, down by 2.3 bps from the 5.566% fetched last week, with accepted yields ranging from 5.54% to 5.55%.