Investors on Monday clearly indicated continued bias for safe investments and collectively opted to park their cash in government-issued debt papers as the uncertainty over the duration of the pandemic hangs.
National Treasurer Rosalia de Leon expressed satisfaction with an aggressive market whose collective bids brought down Treasury bill rates across the board.
“Rates dropped because investors prefer safe havens and shorter tenor GS (government securities),” she explained.
The rate for 91-day T-bills averaged 1.587 percent, a 6.2 basis point drop from 1.649 percent a week ago.
The yield for both the 182- and 364-day benchmarks average 1.687 and 1.782 percent, respectively, a 6.3 and 7.3 basis point improvement from 1.750 and 1.855 percent on the same.
The BTr raised the full P20 billion target for the week as the exercise attracted P93.97 billion worth of tenders, or an oversubscription by almost five times.
Treasury officials also said given the retail Treasury bond (RTB) sale scheduled for 16 July 2020, the proposed 35-day T-bills sale scheduled on 14 July is cancelled.
De Leon said that latest IOU outcome, which has trended lower, could be an indication of where the rates would be for the five-year RTB issue.
The Treasury chief also said current bondholders could choose to avail of the new offering instead of waiting for the IOUs to mature.
“There are incentives for individuals. Holders may opt not to wait for maturity but get new bonds,” De Leon said.
“RTB are more safe, have very minimal risk since (it is) government issued and by investing in RTB, you invest for your future and support (the) government for a quick recovery. That is more rewarding,” she said.