The Bureau of the Treasury (BTr) made a full award on the treasury bills auctioned yesterday amid strong investor demand for the short-term IOUs.
The auction was more than two times oversubscribed with total bids reaching P53 billion, versus the P20 billion offering.
“For this auction, we see again coming from the liquidity onshore, we have very significant participation particularly on the one-year tenor,” Rosalia de Leon, national treasurer, said after the auction in the BTr office in Manila.
“We also saw that rates continue to trend downward given the expectations of possible another rate cut by the Bangko Sentral (ng Pilipinas), coming from the emergency cut made by the Fed last week. And also we’ve seen that oil prices have plunged because there’s oil price war that has been started following the non-agreement by the oil-producing members of the oil production,” she added.
The 91-day paper fetched a rate of 3.024 percent, 1.1 basis points (bps) higher versus the previous average of 3.013 percent.
Tenders amounted to P10.15 billion, with a full award of P6 billion.
For the half-year securities, the yield was 3.312 percent, 1.2 bps down from the previous rate of 3.324 percent.
Demand was more than twice oversubscribed at P12.193 billion with the P6 billion offering fully awarded.
Lastly, the rate for the one-year was 3.588 percent, 9.6 bps lower than the previous 3.684 percent.
The government fully sold P8 billion, with tenders nearly four times the amount at P30.68 billion.
Meanwhile, de Leon said the plan for the Panda bonds, which was eyed to be issued this month, has been set aside due to the coronavirus disease 2019 (COVID-19) outbreak.
“I think we are not seeing any Panda issuance at this time obviously because of the COVID-19. We’ll have to see in terms of the rates, and of course (if) there would be opportunities for other markets to be able to make up for possible take up from the Panda issuance. Also, we should not discount the onshore market which you see is very liquid,” de Leon said, adding it is likely there won’t be any Panda issuance for the first half of the year.
“(There) are things that we have to continue to watch in terms of market developments given where we are right now and also the lingering impact of COVID-19. But we are taking advantage of the very liquid onshore market for our funding so we’ve seen that we’ve been making full awards because of the lower rates that we’re also receiving during the auctions,” she said.
