By Joann Villanueva/PNA
MANILA — The Bureau of the Treasury’s (BTr) auction committee on Monday only partially awarded the benchmark 91-day Treasury bill (T-bill) but fully awarded the longer tenor papers after taking into account the strong demand and high liquidity.
Also, rates of all tenors declined, which National Treasurer Rosalia de Leon also attributed to expectations of continued deceleration in domestic inflation.
The rate of the 91-day paper fell to 5.396 percent from 5.411 percent during the auction last January 7.
It was offered for PHP6 billion but investors submitted short of this amount at PHP5.955 billion. The auction committee awarded PHP5.205 billion.
On the other hand, the rate of the 182-day T-bill dropped to 6.154 percent from 6.424 percent in the previous auction.
This tenor was offered for PHP6 billion but tenders reached nearly three times at PHP17.260 billion. The auction committee made a full award.
Also, the interest rate of the 364-day paper dropped to 6.253 percent from 6.641 percent in last week’s auction.
Tenders amounted to PHP43.724 billion, almost fourfold compared to the PHP11.2 billion offering. The auction committee also made a full award for this tenor.
With the strong demand for the longer-tenor papers, de Leon said she decided to again open the tap facility for the one-year paper, offer volume was set for PHP8 billion, while all three tenors were offered also through over-the-counter (OTC) sale.
She explained that OTC sale of BTr-issued debt papers will likely be a regular practice for tax-exempt institutions (TEIs) so “they could participate.”
“Otherwise there is no incentive because they are tax-exempt. If they don’t buy from primary (market) then they have to pay the tax,” she said.
TEIs are the government-owned and controlled corporations (GOCCs).
De Leon added that even if approval for this year’s national budget remains pending before Congress, the budget for the first quarter has been made available through the re-enacted budget, thus, the BTr can award debt instruments.
She also pointed out that the BTr still has account payables, thus, it has available funds.
