Government sells P10.3B worth of T-bills

MANILA, Philippines – The government sold P10.3 billion worth of 91, 182 and 364-day Treasury bills (T-bills) in an auction yesterday as investors scrambled for government debt papers.

The 91-day T-bill fetched an average rate of 1.041 percent, below the previous rate of 1.655 percent.

Investors tendered a total of P9.140 billion for this paper, allowing the government auction committee to sell P1.4 billion or above the original offer of P1 billion.

The 182-day T-bill, meanwhile, fetched an average rate of 1.791 percent, also way below the previous rate of 2.414 percent.

As with the three-month paper, the government was able to sell more than the original plan. Investors tendered a total of P16 billion for this paper, allowing the government to sell P4.9 billion or above the P3.5-billion that it had originally programmed.

For the 364-day T-bill, the government made a full award of P4 billion as investors tendered a total of P7.750 billion.

Deputy Treasury Eduardo Mendiola who chaired yesterday’s auction said investors submitted aggressive bids. “Today was a good one. We’ve seen bidders bidding aggressively,” he told reporters after the auction.

Mendiola said investors reacted positively on the Department of Finance’s announcement of a lower-than-expected budget deficit ceiling for 2010. “They know that we intend to maintain fiscal discipline,” Mendiola said.

Yesterday, Finance Secretary Cesar Purisima reported that the budget deficit for 2010 amounted to P314.4 billion or below the ceiling for last year of P325 billion.

Mendiola said the recently concluded sale of P104 billion worth of retail Treasury bonds (RTBs) also sent investors the signal the government has a strong cash position.

“They know we have P104 billion so it means we are not hard pressed for cash, so they cannot just bid up,” Mendiola said.

Last March 1, the government concluded the sale of 104 billion worth of five-day and 10-year RTBs.

Mendiola said that because of the strong demand for RTBs, the government may issue less T-bills and T-bonds in the next three quarters. –Iris C. Gonzales (The Philippine Star)