T-bill yields go down on strong demand for safe-haven assets

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday at lower rates on strong demand for safe-haven assets amid broad market volatility.

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The Bureau of the Treasury (BTr) raised P22 billion as planned from the T-bills it auctioned off as the offering was almost four times oversubscribed, with total bids reaching P80.475 billion. However, this was lower than the P117.84 billion in tenders recorded on Sept. 22.

The Auction Committee made a full award of its offer as all T-bill tenors fetched average rates that were lower than those seen at last week’s auction and prevailing secondary market yields, the BTr said ina statement.

Broken down, the Treasury borrowed P7.5 billion as planned via the 89-day T-bills as total tenders for the tenor reached P21.93 billion. The three-month paper was quoted at an average rate of 4.828%, down by 5.5 basis points (bps) from the 4.883% recorded in the previous auction. Yields accepted were from 4.71% to 4.9%.

The government also raised P7.5 billion as programmed from the 182-day securities as tenders amounted to P31.2 billion. The average rate of the six-month T-bill was at 5.075%, easing 0.6 bp from the 5.081% fetched last week, with accepted rates spanning from 4.94% to 5.117%.

Lastly, the Treasury sold the planned P7 billion in 364-day debt as demand for the tenor totaled P27.345 billion. The average rate of the one-year T-bill dropped by 2.4 bps to 5.171% from 5.195% previously. Bids awarded carried yields from 5.027% to 5.215%.