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 PRESSROOM / NEWS
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 | Republic of the Philippines
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Pablo Ocampo, Sr. Street
Manila 1004
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April 19, 2010
T-BILL RATES: APRIL 19, 2010
BTr
FPPO-JEP
The National Government today raised more funds than planned. Market players heavily competed and showed strong demand across all tenors for the short-term Treasury bills amid a confluence of factors such as continuing stable economic fundamentals and the excess liquidity in the bond market. Today’s auction was mainly driven by the ample liquidity in the market that should be put to work. The system was obviously awash with investible funds and given a substantial amount of maturing government debts this week, market players were really cash-rich as they came in today’s auction. Favorable and benign economic outlook also prompted market players to bet aggressively on these short-term papers. The Auction Committee obviously took advantage of this favorable auction, borrowing more than planned for the benchmark 91-day and awarding as planned for both the 182- and the 364-day debt papers.
However, today’s Treasury bill auction yielded mixed results and the rates across the board once again barely moved, mirroring the movement of these debts in the secondary market last week. The rate of the benchmark debt declined while both the 182- and the 364-day papers were allowed by the Auction Committee for a slight uptick, somewhat indicating market players’ wait-and-see stance as they await the March deficit data to be released this Wednesday and the outcome of the central bank’s policy meeting to be held the next day. The news that BIR may not hit its collection target dampened market players causing a slight pressure on the debt yields in the secondary market last week. On the other hand, it is widely expected that the Monetary Board of the Central Bank will still keep its key policy rates unchanged on its policy meeting later this week given a benign inflation outlook. The BSP’s overnight borrowing and lending rates are currently at 4% and 6%, respectively. Meanwhile, the BTr already announced that NG will auction multi-currency RTBs this Wednesday worth $500 million that will cater to OFWs and institutional investors. The RTB auction will end on April 28.
At today’s auction, the benchmark 91-day T-bill rate fell by 5.5 basis points to an average of 3.82 percent from 3.875 percent during the April 5 auction. The six-month T-bill, on the other hand, fetched 1.5 basis points higher to average at 4.036 percent from the 4.021 percent rate while the one-year paper was up by 2.3 basis points at 4.408 percent from 4.385 percent awarded in April 5 auction. The increase on both the longer-tenor T-bills was considered not significant as such could be attributed to market fluctuations.
The Bureau of the Treasury sold P8.6 billion worth of the short-term Treasury bills, when it planned to auction only P8.0 billion worth of the debt papers given an attractively cheaper borrowing cost of the 91-day and the strong appetite observed across all tenors. The bellwether debt was more than four times oversubscribed with tenders reaching P6.304 billion against the original offer of P1.5 billion thus, the auction committee sold P2.1 billion. The six-month Treasury bill was more than three times oversubscribed at P8.710 billion against the P3 billion original offer, while total tenders for the one-year debt reached P6.654 billion against the P3.5 billion offering. The government awarded both the six-month and the one-year debt as planned.
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