The Bureau of the Treasury on Monday raised a bigger P21 billion from short-dated treasury bills as rates declined across the board due to stable inflation and improving economic prospects. The Treasury was supposed to sell only a total of P15 billion or P5 billion each across the three tenors but it doubled the award for noncompetitive bids such that P7 billion were sold for each tenor. The benchmark 91-day T-bill fetched an average rate of 1.176 percent, down from 1.235 percent last week.
The 182-day IOUs were awarded at 1.422 percent, down from 1.472 percent previously. The Treasury sold the 364-day debt paper at an annual rate of 1.649 percent, down from 1.723 percent. National Treasurer Rosalia de Leon attributed the lower bid rates to “steady inflation and good progress on vaccination.”
Headline inflation in May settled at 4.5 percent year-on-year, the same rate of increase in prices of basic commodities as the two previous months. While still above the government’s 2 to 4 percent target range of manageable inflation, the May figure reflected easing food price pressures. De Leon also attributed the decline in T-bill rates to lower-than-expected US nonfarm payroll data, which she said was “tempering taper action” from the US Federal Reserve.
Also, De Leon pointed to robust demand owing to oozing domestic liquidity coming from P34 billion in maturing government-issued securities this week plus P131 billion in retail treasury bonds, which will be redeemed by investors on June 13. Tenders totaled P92.5 billion, making the auction six times oversubscribed.