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Only P4B from final T-bills sale

Joshua Lao

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The Bureau of Treasury (BTr) on Monday concluded its 2018 auctions by raising only P4 billion of its original P15 billion offering in Treasury bills (T-bills) as investors proved wary of market developments. Their skittishness was best shown by sharply lower demand for the government securities on offer across all tenors.

The market also tried convincing the BTr to accept the double-digit hike on both 182- and 364-day T-bill rates, forcing the agency to reject both.

The rate for the 91-day tenor dropped by 2.7 basis points to 5.323 percent from the previous 5.350 percent as demand decelerated to P6.57 billion from P7.65 billion.

Had the 182- and 364-day T-bills been accepted, their rates would have averaged 6.594 percent and 6.860, respectively, an increase of 25 basis points for the former and 27.5 basis points for the latter.

Likewise, demand for both benchmarks declined to only P5.88 billion and P6.85 billion accordingly from the registered P8.52 billion and P7.37 billion on the same last week.

In all, the BTr was able to raise P4 billion of the P15 billion original offer after the auction attracted P19.3 billion in total tenders.

National Treasurer Rosalia de Leon told reporters the investors remained in the sidelines while waiting for the latest US Fed outcome.

“I think they are still waiting for the (Fed) outcome and secondly, a lot of banks are holding unto their cash given the heavy withdrawals at this time and they would prefer to stash cash rather than put it into securities,” De Leon said noting on the outcome of the 91-day tenor.

“On our end, we don’t see the need to paying up more for the 182-(benchmark) considering that we all know that inflation is on a downhill already and the price tag for those maturities are sufficient already and it should be much higher than what the current BVAL rates are,” she added.

The Treasury chief then said that the Fed might pause in 2019 given the numbers coming out of the United States which add to the risks over the horizon for investors.

Moreover, De Leon said that issuance for other planned securities such as the Marawi bonds and ROP would be pushed in 2019.

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