Gov’t hikes award of T-bills on strong demand

THE GOVERNMENT hiked the volume of Treasury bills (T-bills) it awarded on Monday as the offer was met with robust demand and all tenors fetched average yields below prevailing secondary market levels, as the market expects below-target November inflation that could cement prospects of another rate cut from the Bangko Sentral ng Pilipinas (BSP) next week.

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The Bureau of the Treasury (BTr) raised P25 billion via the T-bills it auctioned off, higher than the P22-billion plan, as the offer was almost four times oversubscribed, with total tenders reaching P85.26 billion. This was also slightly higher than the P84.87 billion in bids recorded last week.

The Auction Committee made a full award as the papers were quoted at yields that were all lower than secondary market rates, the Treasury said in a statement.

Broken down, the government raised P7 billion as planned from the 91-day T-bills as the tenor was met with demand worth P29.815 billion. The three-month paper fetched an average rate of 4.812%, down by 3.7 basis points (bps) from 4.849% in the previous auction. Yields accepted were from 4.770% to 4.844%.

Meanwhile, the Treasury increased its award of 182-day debt to P10.5 billion from the P7.5-billion program as bids reached P29.75 billion. The strong appetite caused the BTr to double its acceptance of noncompetitive bids for the tenor to P6 billion, it said.

The average rate of the six-month T-bill went down by 4 bps to 4.93% from 4.97% last week. Tenders awarded carried yields from 4.89% to 4.965%.