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Mixed results in T-bill auction

By Mary Grace Padin (The Philippine Star)
Updated February 28, 2017 – 12:00am

MANILA, Philippines – Interest rates on Treasury bills (T-bills) were mixed in yesterday’s auction amid strong demand from participating banks.

The benchmark 91-day T-bills fetched a rate of 2.36 percent, 10.8 basis points higher than the previous yield of 2.252 percent.

The BTr received a total of P8.57 billion in tenders for the P6 billion worth of 91-day it offered.

A local bond trader said the results of the auction were within market expectations.

“I think the primary market rate for T-bills is consolidating, meaning it’s trying to align its level with the secondary market, as well as the BSP’s (Bangko Sentral ng Pilipinas) TDF (term deposit facilities),” the trader added.

The trader said the healthy demand for the papers also indicate a high liquidity for the peso.

The yield for the 182-day debt paper was also up 12 basis points to 2.587 percent from the previous rate of 2.467 percent.

Only P2.43 billion of the P5 billion offering was awarded, with total tenders reaching P5.13 billion.

“The 182-day (T-bills) of the three has the slightly muted response from the dealers so we were able to partially award just to be able to manage the curve of the short end,” Erwin Sta. Ana, deputy national treasurer, told reporters after the auction.

“We think the reason why the 182-day offering behaved like that is because of the anticipation of the moves from the Fed (US Federal Reserve) in the second half of the year,” he added.

As for the 364-day T-bills, investors tendered P9.405 billion, more than twice the P4 billion offering. The yield for the one-year debt paper stood at 2.763 percent, slightly lower than the previous average of 2.766 percent.

“The surprise today is really on the 364-day (T-bills) because as you may have observed in the past, it is quite undersubscribed. But now you’re seeing that it is in fact the most in demand of the three,” Sta. Ana said.

“I think it has something to do of a perceived normalization of interest rate at a one year horizon, that’s what we are seeing at this stage,” he added.

Overall, Sta. Ana said the auction received a better turnout than previous one, especially with the demand reaching overP23 billion.



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