35-day T-bill rate fell to lowest-ever after hefty BSP easing

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MANILA, Philippines — The Bureau of the Treasury on Tuesday sold P15 billion in 35-day T-bills at 1.684 percent, the lowest-ever rate for the short-dated securities revived at the height of the COVID-19 lockdown.

Tuesday’s auction generated P62.5 billion in bids, making it over four times oversubscribed.

National Treasurer Rosalia V. de Leon attributed the strong demand to the Bangko Sentral ng Pilipinas’ (BSP) surprise and hefty 50-basis points cut in the key policy rate to a record-low 2.25 percent last week.

In turn—and just like the longer T-bills offered last Monday, the average rate for the five-week IOUs maturing on August 5 fell below the 2-percent mark for the first time since this tenor was again offered in April.

A total of P34 billion in 35-day treasury bills were outstanding to date, the Treasury said in a statement.

Despite the robust tenders, de Leon said the Treasury did not upsize its offering through the tap facility window due to the debt paper’s “very short tenor.”

On Monday, the Treasury sold another P10 billion in 364-day T-bills via tap.

The 11 government securities eligible dealers (GSEDs)-market makers tendered P28 billion for the additional one-year treasury bills auctioned off by the Treasury.

JPV


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