T-bill rates ease as demand swells

March 12, 2024 | 12:00am

MANILA, Philippines — Demand for the government’s short-term securities rose to its highest level in three months, with rates slightly going down even after inflation quickened anew in February.

The Bureau of the Treasury yesterday fully awarded the entire P15 billion of T-bills on offer.

T-bill demand jumped 37 percent week-on-week to reach P50.71 billion. The auction was oversubscribed by 3.4 times.

This is also the highest value of bids in about 12 weeks or since the P72.21 billion recorded on Nov. 28, 2023.

Bids went up across the board to P13.55 billion, P17.63 billion and P19.52 billion, for the three, six and 12 month-offers, respectively.

Demand was high even after inflation quickened to a two-month high of 3.4 percent in February from 2.8 percent in January.

This also came after more dovish signals from the US Federal Reserve of higher odds of a possible rate cut.

Yields for the three tenors also declined across the board in reference to last week’s rates but were mixed versus the secondary market.

Rates for the 91-day offer inched up 0.7 basis points to 5.772 percent from the secondary level of 5.765 percent, but was lower than the last auction rate of 5.778 percent.

Yields averaged 5.966 percent for the 182-day T-bills, 0.9 basis points below the secondary rate and also down from last week’s 5.995 percent.

The 364-day short-dated debt papers saw rates at 6.087 percent, significantly lower by 1.8 basis points from the reference rate of 6.105 percent, as well as last week’s level of 6.1 percent.

The Treasury awarded P5 billion in each tenor.

For the month of March, the Treasury will secure P180 billion from domestic creditors.

Of this, P60 billion is expected to come from short-dated T-bills. It has so far raised half of the programmed borrowing.