Banks demand for more PHL T-bills

The Bureau of the Treasury (BTr) offered a total of Php 15 billion worth of 91-, 182-, and 364-day securities but bids reached Php 23.105 billion. (Photo: Bureau of the Treasury-Intramuros, Manila/Facebook)

MANILA—Banks’ appetite for government-issued Treasury bond (T-bond) rose across-the-board Monday.

The Bureau of the Treasury (BTr) offered a total of Php 15 billion worth of 91-, 182-, and 364-day securities but bids reached Php 23.105 billion.

Deputy Treasurer Erwin Sta. Ana told reporters after the auction that result of this week’s auction was better than in the past.

This after the benchmark three-month paper, which was offered for Php 6 billion attracted Php 8.57 billion bids, the six-month bill received Php 5.13 billion bids, more than the Php 5 billion offering, and the Php 4 billion offering for the one-year T-bond received bids that were more than twice at Php 9.405 billion.

The auction committee made a full award for both the 91-day and 364-day tenors but awarded only Php 2.43 billion for the six-month paper.

Average yield for the shortest tenor T-bill stood at 2.36 percent while it was 2.58 percent and 2.76 percent for the six-month and one-year securities, respectively.

Sta. Ana attributed the partial award for the 182-day bill to the “muted response” of banks on the T-bond offering.

He said they still awarded some amount for this tenor “to manage the curve of the short end.”

“We think that the reason why the 182 behaved like that is because of the anticipation of the moves from the Fed in the second half of the year,” he said.

Sta. Ana said latest number on the probability of a hike in the Federal Reserve rates in the second half of this year hit around 40 percent recently and he expects the rate to increase further in the coming weeks.

He said turn out of bids for the longest tenor T-bill came as a surprise given market’s recent preference for short term securities on account of the Fed rate hike anticipation.

“So I think it has something to do of a perceived normalization of interest rate at a one year horizon,” he added.