T-bill rates up ahead of Holy Week holidays

Deputy Treasurer Erwin Sta. Ana said “demand is skewed on the very short bill” because banks need liquidity to be able to cater to their clients requirements during the holidays. (File Photo: @TreasuryPh/Twitter)

MANILA — The rates of Philippine Treasury bills (T-bills) went up Monday, with investors’ preference very apparently leaning toward the shortest tenor, as banks want to keep their cash ahead of the long weekend due to the celebration of Holy Week.

Rate of the 91-day paper slightly rose to 5.614 percent from 5.612 percent during the auction last April 8.

The Bureau of the Treasury (BTr) offered it for PHP4 billion and awarded in full after banks submitted a total of PHP9.587 billion worth of bids.

Rate of the 182-day paper inched up to 5.987 percent from 5.982 percent last week.

This tenor was, however, partially awarded at PHP3.264 billion against the PHP5 billion offering. Banks submitted PHP7.819 billion worth of tenders.

Also, the auction committee rejected all bids for the 364-day paper after banks asked for high yields. BTr offered this tenor for PHP6 billion and banks submitted PHP7.378 billion worth of tenders.

Deputy Treasurer Erwin Sta. Ana said “demand is skewed on the very short bill” because banks need liquidity to be able to cater to their clients requirements during the holidays.

There are only three working days this week as Maundy Thursday and Good Friday are regular holidays in the country.

Sta. Ana said banks’ preference for the 91-day T-bill this week can also be attributed to lack of major data within the week.

“So I think it’s safer for them to park it at the shortest tenor,” he said.

Meanwhile, the BTr official said they have not decided on how many tranches would the planned Panda bond issuance will be although he said that they filed for a total issuance of 6 billion yuan before the China’s National Association of Financial Market Institutional Investors (NAFMI).

“We are working on a transaction potentially as early as next week or maybe it can move depending on the approvals that we will be obtaining especially from NAFMI and PBOC (People’s Bank of China). We’ll know better the size once we make that decision to go,” he said.

Sta. Ana cited earlier statements by Finance Secretary Carlos Dominguez III for a reduced issuance size given the budget disbursement situation by the Philippine government brought about by the delay in the approval of the PHP3.7-trillion 2019 national budget, which President Rodrigo R. Duterte signed Monday.

The planned issuance will be the second for the country after the 1.46 billion yuan maiden Panda bond issuance in March 2018.