T-bills 4x oversubscribed total tenders exceed P91B

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The Bureau of the Treasury (BTr) once again upsized the amount it awarded to the auctioned treasury bills yesterday amid continued demand for the short-term securities.

The T-bill auction was 4.1 times oversubscribed, attracting P91.1 billion in total tenders. 

The BTr awarded P27.6 billion instead of the P22-billion program, increasing the accepted amounts for the three-month and six-month securities.

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The 90-, 181-, and 363-day IOUs fetched average rates of 5.113 percent, 5.488 percent and 5.724 percent, respectively.

These were all lower than the previous auction and the prevailing secondary market rates. 

According to the BTr, the maturity dates across all tenors were adjusted due to the upcoming holiday.

“Inflation fears (are) driving demand for short-term tenors as inflation expectation rise,” Jonathan Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said.

Meanwhile, Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the treasury-bill average auction yields declined for the fourth straight week, amid the possible local policy rate cut as early as the first BSP rate-setting meeting on February 13. There were also signals of possible rate cut coming from local monetary officials, he said.

T-bill average auction yields also eased after the initial implementation of the maximum suggested retail price of imported rice on January 20, 2025.” Ricafort said.

He said the possible declaration of a food security emergency before the end of the month could help further reduce local rice prices, which account for about nine percent of the inflation basket, and also support benign inflation.

“These could support/justify further local policy rate cuts that could match future Fed rate cuts,” Ricafort said.

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