Rates of the Philippines Treasury bills (T bills) dropped across the board Monday partly on concerns on the coronavirus disease 2019 (Covid 19) and expectations for another cut in the Bangko Sentral ng Pilipinas' (BSP) key rates.
Average rate of the 91 day paper fell to 3.072 percent from 3.115 percent during the auction last February 10.
The tenor received tenders amounting to PHP21.798 billion, more than thrice the PHP6 billion offer. The auction committee made a full award.
Rate of the 182 day paper averaged at 3.420 percent, lower than its 3.461 percent in the previous auction.
Bids totaled to PHP20.792 billion, more than threefold the PHP6 billion offer, which was also fully awarded.
Average rate of the 364 day T bill declined to 3.836 percent from 3.908 percent last week.
Tenders reached PHP35.755 billion, nearly six times the PHP8 billion offer. The auction committee made a full award.
National Treasurer Rosalia de Leon said aside from the anxieties on the Covid 19 and hopes for a BSP rate cut as early as the second quarter this year, investors also noted Fitch Ratings' decision to revise its ratings outlook on the Philippines' 'BBB' credit rating from stable to positive.
I think those are the expectations. They see the flight to safe haven. Of course, that's the Treasury bond so we are seeing that our liquidity is going back to government securities market, she said.
With the strong demand for the one year paper, de Leon said they decided to open the tap facility for this paper.
In a memorandum to the 11 government securities eligible dealers (GSEDs) and market makers posted on the Bureau of the Treasury (BTr) website Monday, the Bureau said the tap facility window was opened for the one year T bond for PHP8 billion at a rate of 3.836 percent.
Tap facility is another window where BTr sells government securities.
Source: Philippines News Agency