THE P15 billion worth of Treasury bills offered by the government on Monday was more than three times oversubscribed due to strong demand, as investors anticipated an increase in the US policy rates this week.
Data from the Bureau of the Treasury showed the auction attracted tenders of P51.8 billion, significantly higher than the P15 billion offered on the auction block. The auction committee opted for a full award of the volume offered.
“The 91-day and 182-day debt papers fetched a rate of 2.103 percent and 2.456 percent, down by 4.5 and 3.8 basis points, respectively, from the previous T-Bill auction,” the Treasury said.
The 364-day bill, meanwhile, averaged 2.850 percent, up by 1.5 bps from 2.835 percent the paper fetched at last month’s auction.
“Auction results revealed strong demand for the T-Bills ahead of the FOMC meeting within the week wherein it could raise US policy rates,” it said.
The Federal Open Market Committee last raised interest rates in March 2017 and predicted two more rate hikes this year and possibly three more next year. Those forecasts will be updated this month.
Earlier, the Bureau of the Treasury raised P175 billion from its latest issuance of three-year retail treasury bonds, including those generated from roadshows conducted nationwide.
National Treasurer Rosalia de Leon said total bids for the RTBs reached P500 billion but the Treasury awarded only P105 billion in roadshow auctions.
The P175 billion raised was significantly bigger than the 10-year P100 billion generated in September last year, the first issuance under the Duterte administration.
The agency earlier said the issuances were aimed at augmenting funds for the implementation of development projects under the Duterte administration, especially infrastructure projects.
The auction conducted on March 28 generated strong demand and fetched a coupon rate of 4.25 percent with total tenders reaching P86.2 billion for a bid-to-cover ratio of 2.87 percent.
This prompted the auction committee to expand its offering from the initial announcement of P30 billion to P70 billion to accommodate market appetite.
