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Liquidity still ample despite lower tenders

Joshua Lao

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BTr’s 7-year bonds attracted only P22.1 billion in tenders, slightly higher than the offer of P20 billion.

Peso liquidity across the economy remains ample although this was not reflected clearly in the outcome of the sale of seven-year Treasury bonds (T-bond) on Tuesday, Deputy Treasurer Erwin Sta. Ana said.

“We don’t see it that way, liquidity is still quite ample. The initial thinking is basically the wait-and-see attitude of the participants,” Sta. Ana said of significantly lower demand for the reissued 7-year T-bond, which paled in comparison to an earlier sale.

That particular T-bond sale in 16 July 2019 attracted P74.94 billion worth of tenders, significantly higher than only P22.14 billion at Tuesday’s auction for the same.
The yield for the 7-year benchmark averaged 4.503 percent, a 34.2 basis point improvement from 4.845 percent.

In all, the BTr’s 7-year bonds attracted only P22.1 billion in tenders, slightly higher than the offer of P20 billion.

According to the Treasury, which awarded only P10.39 billion, total outstanding volume for the series now stands at P100.4 billion.

Sta. Ana traced the reduced tenders to external events as uncertainty on what the US Federal Open Market Committee (FOMC) will do next at their upcoming meeting.

“The (auction) committee thinks that it’s basically a reflection of a wait-and-see attitude from the participants, because you know FOMC is around the corner, US Treasuries are increasing overnight (and) you can see some increases in the 10-year. So that’s actually brought about the results,” Sta. Ana said.

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