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Ample liquidity prods better IOU rates

Joshua Lao

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The recent spike in inflation, which was widely attributed to supply-side shocks along with the still ample liquidity in the financial market drove better rates for the Bureau of Treasury’s (BTr) Treasury bill auction on Monday.

As such, the BTr was able to raise more than its P20 billion program with P24 billion, following its decision to double its accepting volume for non-competitive bids on both 91- and 182-day benchmarks.

Still, the auction attracted a hefty P95.3 billion, oversubscribing the original offer by almost five times.

National Treasurer Rosalia de Leon said that they won’t open their tap facility despite the robust demand while noting that the market overlooked the recent inflation spike as such was considered transitory.

“Liquidity remains strong with P20 billion maturity this week. Price pressures are seen as temporary and will be alleviated with measures like price caps and food imports,” De Leon explained.

Rates for both the 81- and 192-day T-bill stood 0.846 and 1.094 percent, respectively, a 10.5 and 22.5 basis point improvement from the posted 0.969 and 1.323 percent week-ago.

Likewise, yield for the 364-day tenor fetched an average of 1.446 percent, 9.6 basis points better than the recorded 1.542 percent in the same comparable period.

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