The Bureau of the Treasury (BTr) made a full award for the treasury bills auctioned yesterday after it was met by strong market demand, prompting the agency to open its tap facility for the one-year IOUs.
The auction was nearly four times oversubscribed, with total bids reaching P78.3 billion compared to the P20 billion offering.
The rates for the 91-day, 182-day and 364-day IOUs were also lower than the previous auction and secondary market rates.
“We’re pleased with the results of the auction. It is the result of, first, the lingering concerns on COVID-19. Of course, we’ve seen rates going down from the revision of the outlook of Fitch from stable to positive. Also, the market gets excited again because of the pronouncement of (Bangko Sentral ng Pilipinas) Governor Benjamin Diokno for another rate cut in the second quarter,” Rosalia de Leon, national treasurer, said after the auction held at the BTr office in Manila yesterday.
“I think those are the expectations. They see the flight to safe haven. So we are seeing that our liquidity is going back to government securities market,” she added.
The 91-day IOU fetched a rate of 3.072 percent, 4.3 basis points (bps) lower than the previous average of 3.115 percent.
Tenders amounted to P21.798 billion, more than thrice the P6 billion which was fully awarded.
The 182-day paper meanwhile has a rate of 3.42 percent, 4.1 bps down versus the previous 3.461 percent.
Demand was also more than thrice at P20.792 billion with a full award of P6 billion.
Lastly, the one-year issuance fetched a yield of 3.836 percent, 7.2 bps lower than the 3.908 percent average recorded in the previous auction for the same tenor.
The auction committee sold P8 billion as planned with tenders more than four times the offer at P35.755 billion.
“For that, we are opening the tap facility (for the one-year) and we might also open the over-the-counter (sale) if there will be demand from GOCC (government-owned and -controlled corporations). We’re opening the tap for another similar amount… given that the volume is about P35 billion for the one-year and we see that there is strong demand for the one year,” de Leon said.
“(For the OTC), it depends on the demand from our GOCC. So we’re still getting how much will be the order size from GOCC but we have received some indications that they are interested,” she added.
