BTr upsizes treasury bill award amid strong investor demand

The Bureau of the Treasury (BTr) exceeded its initial PHP22-billion offering in Monday's Treasury bills (T-bills) auction, raising PHP27.6 billion as strong investor interest drove the auction to be 4.1 times oversubscribed.

Total tenders reached PHP91.1 billion, prompting the Auction Committee to double the accepted non-competitive bids for 90- and 181-day T-bills to PHP5.6 billion each.

For the 90-day T-bills, total bids amounted to PHP32.25 billion, with the BTr accepting PHP9.8 billion, exceeding the PHP7-billion target. The yield for the debt instrument settled at 5.113 percent.

Similarly, the 181-day T-bills garnered PHP26.65 billion in tenders, with the Auction Committee accepting PHP9.8 billion, also surpassing its initial PHP7-billion offer. The average yield for these bills was recorded at 5.488 percent.

For the 363-day T-bills, total tenders reached PHP32.16 billion. The BTr awarded PHP8 billion, with the yield settling at 5.724 percent.

According to Rizal Commercial Banking Corporation Chief Economist Michael Ricafort, auction yields for Treasury bills have declined for the fourth consecutive week, signaling a potential policy rate cut by the Bangko Sentral ng Pilipinas (BSP) at its first rate-setting meeting on February 13, 2025.

Ricafort added that last week’s average yields for 91-, 182-, and 364-day T-bills were 5.165 percent, 5.503 percent, and 5.840 percent, respectively.

He also noted that the recent Philippine government bond issuance, amounting to US$3.29 billion, could ease the national government's need for local borrowing while benefiting from lower borrowing costs and narrower spreads compared to US Treasuries.

"This reflects strong confidence from international investors in the Philippine sovereign credit," Ricafort stated.

The robust outcome of the auction underscores sustained demand for government securities amid favorable market conditions and potential shifts in monetary policy.