RTB sale prompts higher T-bills

Maturing obligations due in a week’s time helped push T-bill rates higher across the board on Monday. contributed photo

Speculation that the Bureau of Treasury (BTr) will sell so-called retail Treasury bonds helped push Treasury bill rates higher across the board on Monday, National Treasurer Rosalia de Leon said.

We have a very strong demand with a bid cover ratio of almost twice. So, we hope this will continue given that there are dovish remarks coming from the Fed and of course, the BSP (Bangko Sentral ng Pilipinas) put on hold their rate during the last policy meeting

But despite the uptick on T-bill rates, the BTr awarded all P20 billion worth of government securities.

Rates for the 91-day tenor inched upward by 6.6 basis points (bps) to 5.550 percent versus the previous 5.484 percent a week ago after demand decelerated to P7.34 billion from P11.33 billion.

Similarly, rates for both 182- and 364-day benchmarks stood 6.6 and 5.9 basis points, respectively, averaging 5.933 percent for the former and 5.983 percent for the latter.

Despite the rate increases, demand for both 182- and 364-day T-bills attracted tenders totaling P11.56 billion and P11.40 billion, respectively from the previous P11.42 billion and P10.89 billion.

In all, the BTr increased its P20 billion offer after attracting a total P30.32 billion in tenders.

The Treasury chief expressed satisfaction with the auction results and hoped investor behavior continues.

“We have a very strong demand with a bid cover ratio of almost twice. So, we hope this will continue given that there are dovish remarks coming from the Fed and of course, the BSP (Bangko Sentral ng Pilipinas) put on hold their rate during the last policy meeting,” De Leon told reporters.

On the anticipated RTB issuance, the BTr chief said a few more things need to be considered carefully.

“That’s anticipated by the market given that we have a P70 billion maturity on 19 February.

But for now, we still have to, given that we still have a very strong cash position,” she said.

“That’s something that we still have to confirm, whether to move ahead and also take into consideration other things before we confirm that we’re going to have the RTB sale because of that huge maturity in February,” she added.

According to her, some of the considerations for the RTB issuance include the approved 2019 national budget, the rate environment for the next couple of weeks as well as the tenor that investors will find attractive.