Treasury bill (T-Bill) rates fell below 2% on Monday following last week’s shock by Bangko Sentral ng Pilipinas (BSP). And, strong interest rate cuts that sent a rush of interested investors to buy government securities in the midst of flushing liquidity.
In the 91-day T-bills benchmark, the Treasury Bureau awarded P7 billion at an average of 1.746%. It was down from 2.068% last week.
The Treasury also sold P5 billion in 182-day debt paper at 1.892%, down from 2.159% previously.
The P14 billion in 364-day IOUs fetched an annual rate of T-bill 1.98%, down from 2.408%during the previous auction.
National Treasurer Rosalia V. de Leon said the rates dipped in the wake of last Thursday’s “unanticipated” 50-base-point reduction in key interest rates by the BSP, bringing the policy rate to a record-low 2.25%. It was due to the COVID-19 pandemic in the midst of an uncertain global economic outlook.
The Treasury doubled the non-competitive bids it had approved to P4 billion. In addition, P8 billion respectively for the three-month and one-year government securities.
As such, T-bills totaling P26 billion collected during Monday’s auction surpassed the initial P20-billion bid.
Tenders totaled P131.4 billion across the three tenors making the auction more than 6.5 times over-subscribed.
As the financial system remained liquid, de Leon said selling retail treasury bonds (RTBs) was “always an option for us to raise funding. Then, for small investors to deploy funds in supporting government priorities at this time, particularly in the battle against COVID-19.”
The Treasury released a new P310.8 billion in three-year RTBs at a coupon of 4.375% to small investors in February.
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