BTr rejects all T-bill bids; investors hold on to cash

Published March 23, 2020, 12:00 AM

by manilabulletin_admin


The Bureau of the Treasury expects investors will continue to hold on to their cash amid uncertainly over the economic impact of the coronavirus disease (COVID-19) contagion in the country.

National Treasurer Rosalia de Leon said that the national government rejected all bids for its short-dated IOUs up for sale yesterday after receiving “not serious” and “throwaway bids” for their ₱20 billion offering.

De Leon said that local investors’ “preference is to hold cash with lingering virus.”

For this reason, she said that the treasury expects this sentiment will continue amid fears over COVID-19 and the month-long enhanced quarantine in the entire Luzon island.

On Monday, the bureau attempted, but failed, to raise ₱20 billion through the sale of Treasury bills, consisting of ₱6 billion each for the 91- and 182-day securities and ₱8 billion through 364-day notes.

Average bids increased across all tenors from previous auction, reaching 3.841 percent, 4.766 percent and 5.350 percent for the 91-, 182-, and 364-day T-Bills, receptively. Furthermore, it was also undersubscribed with total bids only reaching ₱14.5 billion.

Last week, de Leon assured that the government can still afford to spend despite the expected shortfall in tax collections next month following the extension of income tax payments from April 15 to May 15.

Finance Secretary Carlos G. Dominguez III said that the tax payment extension, granted by the Bureau of Internal Revenue, would result in an estimated delay and shortfall in tax collections of about ₱145 billion.

But Dominguez said the delay in collecting the ₱145 billion would have “no impact” on the government’s spending plans this year earmarked at ₱4.16 trillion.

Earlier, Dominguez said that the Duterte administration was preparing additional economic stimulus package to urgently support the country’s most vulnerable sectors to the effects of monthlong enhanced quarantine measures.

Dominguez said the government’s additional relief funds, composed of food and cash subsidies as well as health care and other necessities, were “in the works” in coordination with the local government unites (LGUs).

Asked what sectors to benefit from the additional support, Dominguez said “workers in the informal sector.”

Dominguez said the amount for the additional economic package will be determined by the Department of Social Welfare and Development (DSWD), Department of Interior and Local Government (DILG) and Department of Health (DOH).

The Duterte administration already unveiled last week its initial ₱27.1-billion economic package to help frontliners fight the COVID-19 pandemic and provide immediate economic relief to people and sectors affected.