Philippines’ Bureau of the Treasury Exceeds Target in T-bills Auction, Raising PHP 22.6 Billion

MANILA — The Bureau of the Treasury (BTr) successfully raised PHP 22.6 billion in a recent auction of Treasury bills (T-bills), surpassing its initial target of PHP 20 billion, driven by strong investor demand and favorable economic signals.

According to Philippines News Agency, the auction attracted substantial interest, with bids totaling PHP 46.7 billion, making it 2.3 times oversubscribed. This robust participation led the committee to accept double the planned volume for non-competitive bids for the 182-day T-bills. The 91-day T-bills drew PHP 15.5 billion in tenders, with the BTr accepting the originally offered amount of PHP 6.5 billion, while the average yield slightly increased to 5.717 percent from the previous week’s 5.698 percent.

The 182-day T-bills saw an even greater interest, with PHP 17.5 billion in total bids and PHP 9.1 billion raised, exceeding the PHP 6.5 billion offered. The yield on these T-bills settled at 5.978 percent, slightly up from last week’s 5.968 percent. The 364-day T-bills, with bids amounting to PHP 13.7 billion, raised the full offered amount of PHP 7 billion, with an average yield nearly steady at 6.072 percent.

Economic analysts, including Rizal Commercial Banking Corporation’s chief economist Michael Ricafort, attributed the increased demand for longer-dated securities to anticipations of policy rate adjustments. Ricafort noted in a Viber message that recent signals suggesting a possible local policy rate cut of 0.25 basis points as early as August 2024 and further reductions throughout the year have spurred investor interest. Additionally, expectations of U.S. Federal Reserve rate cuts following softer-than-expected U.S. inflation data and dovish remarks by Fed Chair Powell have also influenced the market.

The successful auction reflects a heightened appetite for Philippine government securities amid evolving economic conditions both locally and internationally.