Gov’t fully awards T-bills as rates move sideways
THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Tuesday as rates barely moved from their previous levels amid a lack of fresh leads.
The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Tuesday as the offer was over three times oversubscribed, with tenders reaching P55.185 billion. The bids also rose from the P50.867 billion seen in the previous week’s auction.
Broken down, the BTr borrowed P5 billion as programmed from the 91-day debt papers as bids reached P15.584 billion. The average rate of the three-month T-bills was quoted at 1.077%, unchanged from last week’s level.
The Treasury also raised P5 billion as planned via the 182-day T-bills after the tenor attracted tenders worth P22.646 billion. The six-month papers fetched an average yield of 1.405%, down by 0.3 basis point (bp) from the 1.408% seen the week prior.
Lastly, the government made a full P5-billion award of the 364-day securities it offered on Tuesday from P16.955 billion in bids. The average rate of the one-year papers inched up by 0.4 bp to 1.616% from 1.612% previously.
At the secondary market prior to the auction, the 91- 182- and 364-day T-bills were quoted at 1.141%, 1.442% and 1.632%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.
A bond trader said the movement of T-bill rates tracked the trend seen in the past auctions amid a lack of leads.
The trader said yields on short-term debts could see more movement if the central bank changes its policy stance or if there is a significant adjustment in its inflation outlook.
The central bank will keep its policy stance supportive of the economy as long as inflation remains stable, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said last week.
“The BSP will remain vigilant of the current inflation dynamics to ensure that the monetary policy stance will support economic recovery to the extent that the inflation outlook will allow,” Mr. Diokno said. “It will carefully scan the operating environment with a forward-looking perspective to move in a preemptive fashion to address any risks to our price stability mandate.”
The Monetary Board kept benchmark interest rates at record lows at its Aug. 12 meeting, citing the need for an accommodative policy stance due to the risks posed by the reimposition of strict lockdown measures to the ongoing economic recovery.
At that meeting, the BSP hiked its inflation forecast for the year to 4.1% from 4% previously, above the 2-4% target. It also raised its estimates for 2022 and 2023 to 3.1% from 3% previously.
Inflation stood at 4% in July, marking the first time it fell within the government’s target range since December 2020.
However, year to date, inflation averaged at 4.4%, still above the goal.
The Monetary Board will have its next policy review on Sept. 23.
On Wednesday, the BTr will offer P35 billion in reissued five-year Treasury bonds (T-bonds) with a remaining life of four years and seven months.
The Treasury is looking to raise P250 billion from the local market this month: P75 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
