T-bills rates drop to below 2%

The rates of Philippine Treasury bills (T-bills) declined to below 2 percent Monday following the 50 basis points reduction in the Bangko Sentral ng Pilipinas’ (BSP) key rates last week.


The rate of the bellwether 91-day debt paper slipped to 1.746 percent, the 181-day to 1.892 percent, and the 364-day paper to 1.980 percent.


These were at 2.068 percent, 2.159 percent, and 2.408 percent for the three- and six-month and the one-year paper during the auction last June 22.


“Rates dived aftermath of unanticipated 50 bps reduction,” National Treasurer Rosalia de Leon told journalists in a Viber message Monday.


She was referring to the rate reduction made by the BSP’s policy-making Monetary Board (MB) during its rate-setting meeting last June 25, which brought the total slash from the central bank’s key rates to date to 175 basis points.


All the T-bill offerings during the day were fully awarded due to strong demand.


The Bureau of the Treasury (BTr) offered the 91-day paper for PHP7 billion after tenders reached PHP28.74 billion.


The 181-day paper received a total of PHP32.173 billion worth of bids, higher than the PHP5-billion offer.


BTr offered the 364-day paper for PHP14 billion and investors submitted a total of PHP70.538 billion.


De Leon said that while rates continue to go down, they will not use this to just borrow without studying the consequences.


“We also do not want to crowd out (the) private sector,” she said.


She, however, said that if ever they decide to issue another debt instrument, one of the options is the retail treasury bond (RTB), which is intended for small investors.


“We are stretching maturity as investors search for better yields,” she added.


Source: Philippines News Agency

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