Gov’t makes full award of T-bill offer as yields move sideways
THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday as rates moved sideways, with investors preferring to park their excess funds in safe-haven assets.
The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Monday as total tenders reached P46.594 billion, more than three times the initial offer but lower than the P56.36 billion logged in the previous auction.
Broken down, the BTr raised P5 billion as planned from the 91-day debt papers from P11.37 billion in bids. The three-month T-bills fetched an average rate of 1.095%, up by 1 basis point (bp) from the 1.085% seen at last week’s offering.
It also made a full P5-billion award of the 182-day T-bills as the tenor attracted tenders worth P18.36 billion. The six-month paper fetched an average rate of 1.391%, unchanged from last week.
Lastly, the government borrowed the programmed P5 billion through the 364-day debt papers from P16.86 billion in tenders. The one-year securities’ average rate inched up by 0.3 bp to 1.587% from the 1.584% quoted at last week’s offering.
T-bill rates moved sideways and will continue to do so as weekly maturities are now greater than the supply, with the Treasury’s weekly offers of the short-term papers at just P15 billion.
“We suspect that the funds are really intended for this particular investment outlet,” the trader said in a Viber message on Monday.
National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that T-bill rates have been steady while Treasury bond (T-bond) yields have been rising due to expectations that the US Federal Reserve will soon unwind its accommodative monetary policy stance.
The Fed has said it could start reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected.
Ms. De Leon added that the market expects the high inflation seen in the past months to be temporary following the slight easing seen in September.
Headline inflation stood at 4.8% in September, slowing from the 4.9% logged in August but faster than the 2.3% print recorded in the same month last year, the Philippine Statistics Authority reported last week.
September’s headline inflation print hit the lower end of the Bangko Sentral ng Pilipinas’ 4.8%-5.6% forecast range for the month.
Average inflation for the first nine months reached 4.5%, above the central bank’s 2-4% target and 4.4% forecast this year.
On Tuesday, the BTr will offer P35 billion in reissued five-year Treasury bonds with a remaining life of four years and five months.
The BTr is looking to raise P200 billion from the local market this month: P60 billion from weekly offers of T-bills and P140 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. — Jenina P. Ibañez
