THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday even as rates inched up across the board due to the peso’s recent decline against the dollar.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills on Monday as bids for the papers reached P42.086 billion, making the offer nearly three times oversubscribed. However, the demand seen on Monday was lower than the P49.323 billion in tenders logged in the previous week’s auction.

Broken down, the Treasury borrowed the programmed P5 billion via the 91-day papers from total tenders worth P14.7 billion. The three-month T-bills fetched an average rate of 1.068% on Monday, rising by 2.4 basis points (bps) from the 1.044% quoted at last week’s auction.

The government also raised P5 billion as planned via the 182-day T-bills after the tenor attracted bids worth P14.796 billion. The average rate of the six-month papers likewise inched up by 3.3 bps to 1.384% from 1.351%, previously.

Lastly, the BTr made a full P5-billion award of the 364-day securities auctioned off on Monday from P12.59 billion in tenders. The one-year debt papers fetched an average rate of 1.593%, higher by 2.5 bps than the 1.568% quoted for the tenor at last week’s auction.

At the secondary market, the three-month, six-month, and one-year T-bills were quoted at 1.1775%, 1.4123%, and 1.6022%, respectively, before the auction, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

National Treasurer Rosalia V. de Leon said the rates of the T-bills went up across the board after the peso breached the P50-per-dollar mark on Friday.

The peso closed at P50.08 versus the dollar on Friday, retreating by 20.5 centavos from its P49.875 finish on Thursday, data from the Bankers Association of the Philippines showed.

This was the local unit’s weakest close in more than a year or since June 23, 2020’s P50.19-per-dollar finish.

The peso also weakened by 88 centavos from its P49.20 close on July 2.

Meanwhile, a bond trader said: “Rates are just too low at this point and market players who have access to BSP (Bangko Sentral ng Pilipinas) overnight facility would rather place it there or extend to the two- to five-year space for better yield.”

The BSP last month kept benchmark interest rates at record lows for a fifth straight meeting as it vowed to maintain its accommodative stance to support the economy’s recovery.

The policy-setting Monetary Board kept the rate on the BSP’s overnight reverse repurchase facility at 2%. Interest rates on the overnight deposit and lending facilities were also kept at 1.5% and 2.5%, respectively.

The central bank will have its next policy meeting on Aug. 12.

Yields on government securities have been declining since the pandemic started last year amid strong demand from investors wanting to park their funds in these safe-haven assets.

However, rates have been inching up recently as players are seeking higher returns amid lingering uncertainties here and abroad.

On Tuesday, the BTr will offer P35 billion in fresh 20-year Treasury bonds (T-bonds).

The Treasury is looking to raise P235 billion from the local market this month: P60 billion via weekly offers of T-bills and P175 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion from domestic and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. — B.M. Laforga