The Bureau of the Treasury (BTr) upsized the amount it awarded to the auctioned treasury bills on Monday amid significant demand for the short-term securities.
In a statement, the BTr said the auction was 5.4 times oversubscribed, with total bids reaching P118.9 billion.
The BTr raised a total of P30.8 billion compared to the P22 billion initial offer.
In particular, P9.8 billion each was raised via the three-month and six-month securities while P11.2 billion went to the one-year paper.
The BTr’s programmed amounts for the 91-day and 182-day IOUs were P7 billion each, while the 364-day treasury bills got P8 billion.
The 91-, 182- and 364-day securities fetched average rates of 5.118 percent, 5.496 percent, and 5.697 percent, respectively, all lower than the previous auction and prevailing secondary market rates.
Chelsea Vanessa Lim, fixed income portfolio manager at Sun Life, told Malaya Business Insight via e-mail that the strong demand for the one-year tenor reflects the market participants’ preference to lock in rates ahead of the reserve requirement ratio cut by the end of March, as well as the increased likelihood of a 25 basis point policy rate cut in April.
“Recent comments from BSP Governor (Eli) Remolona following lower-than-expected February CPI (consumer price index) data made market participants more confident that a rate cut is imminent in April,” Lim said.
“We expect demand for short-term IOUs to remain strong in the coming weeks as current levels are still barely pricing in any rate cuts this year,” she added.
