T-bill yields down across the board

MANILA, Philippines - Treasury bill rates fell across the board, allowing the government to make a full award of P20 billion, the Bureau of Treasury (BTr) reported yesterday.

Total tenders for the debt papers reached P58.647 billion or almost three times the P20-billion offering. The BTr rejected P38.647 billion after making the full award.

“We were pleasantly surprised that the volumes have increased… given that last week, most of the trading were in the longer-tenor securities,” National Treasurer Roberto Tan told reporters.

“This is the first time we fully awarded the 364-day T-bills compared to previous months, so it’s a good sign that investors are getting more comfortable to enter into longer-term securities,” he said.

The rate for the 91-day T-bills slid to 1.999 percent from July’s 2.078 percent, while the yield for the 182-day T-bills went down to 2.183 percent from 2.333 percent.

The 364-day papers also fetched a lower interest rate of 2.306 percent from 2.552 percent.

Tan said this reflects a “more confident” market despite the pending US interest rate hike, which has been causing volatilities in global financial markets.

At the same time, he stressed the country’s sound macroeconomic fundamentals and manageable inflation environment help buoyed demand for Philippine debt papers.

“The macroeconomic environment in the country has been very positive even as of late and… inflation even went down,” Tan said.

The economy grew by a slower-than-expected 5.2 percent in the first quarter but the rate was still among the fastest in Asia during the period. The government kept its seven to eight percent target for the full year despite the dismal first quarter performance.