The Treasury Bureau rejected P10-billion bids worth 364-day T-bills as the market sought higher yields in anticipation of the first-ever debt paper from the Bangko Sentral ng Pilipinas ( BSP).
National Treasurer Rosalia V. de Leon said the annual premium for the one-year IOUs would have increased from 1.807 percent last week by 16.2 basis points to 1.969 percent if the Treasury had completely issued the securities.
Banks were preparing in expectation of the launch of the maiden BSP as well as the results of the policy meeting this week for the US Federal Reserve, De Leon said. Banks were preparing in expectation of the launch of the maiden BSP as well as the results of the policy meeting this week for the US Federal Reserve.
The BSP will be selling a total of P20 billion 28-day securities as it steps toward more market-based monetary activities while maintaining liquidity. Last week, De Leon said the Treasury co-ordinated closely with the BSP on their respective issuances, especially the curve segments where they will be selling. With more government securities on sale, De Leon claimed investors won’t be confused. She noticed the weekly term deposit facility auction for the BSP also stayed oversubscribed over the past few years.
Nevertheless, the Treasury received a total of P12 billion from Monday’s auction, as the 91-day benchmark reward from the initial P5-billion bid was increased to P7 billion. For the three-month debt issue, the average rate fell from 1.167 percent to 1.15 percent. The Treasury also issued P5 billion in 182-day T-bills, even as the average inched from 1,518 percent last week to 1,589 percent. Tenders totaled P54.1 billion through the three T-bill tenors, making the auction more than 2.7 times over-subscribed.
Meanwhile, De Leon said that while the Bayanihan to Rebound as One Legislation signed by President Duterte last week increased the BSP’s lending limit for COVID-19 response, debt service savings and additional revenue sufficiently protected the latest stimulus spending package in itself.
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