The government sold P17.802 worth of Treasury bills Monday, even as investors demanded higher interest rates on 91-day instruments ahead of the May 9 national elections.
Monday’s auction was oversubscribed across the three tenors with total tenders of P33.17 billion, exceeding the government’s P20-billion offering.
The Treasury said it partially awarded P5.802 billion from the sale of 91-day Treasury bills and fully sold P6 billion worth of 182-day debt papers and another P6 billion worth of 364-day instruments.
“Bid rates were below the secondary benchmarks but the decision to limit the acceptance of bids took into account market cautiousness which sharply drove up rates for 91-day security,” the Treasury said in a statement after the auction.
Interest rates on the 91-day or three-month debt facilities rose 12.3 basis points to 1.674 percent from the previous rate of 1.551 percent. Tenders for the three-month debt papers reached P9.522 billion, slightly higher than the original offer of P8 billion.
The 364-day Treasury bill rates also increased 8.7 basis points to 1.866 percent from the previous auction average rate of 1.779 percent. Tenders for the debt facilities reached P10.690 billion, exceeding the P8-billion offer.
Meanwhile, rates for the 182-day or six month debt papers dropped 10.8 basis points, settling at 1.65 percent from the previous average rate of 1.758 percent. Tenders for the six-month tenor were more than twice the original offer at P12.96 billion.
Latest data from the Treasury showed the government’s outstanding Treasury bills and bonds as stood at P3.84 trillion as of end-March.
The government issued Treasury bonds amounting to P3.56 trillion and sold P279 billion worth of Treasury bills, or IOUs which will mature in a year or below.
Bulk of the government’s outstanding long-term debt as of end-March was in the form of benchmark bonds, or those that can be traded in the secondary market, amounting to P966 billion.
The second biggest chunk was in the form of retail treasury bonds, which require a minimum investment of P5,000 and in multiples of P5,000 thereafter, attracting individual investors. RTBs issued as of end-March stood at P726 billion.
The third biggest type of debt issued by the national government are the seven-year bonds, with an outstanding amount of P494 billion as of end-March.
