By Melissa Luz T. Lopez, Senior Reporter
THE GOVERNMENT raised P15 billion in fresh funds from Treasury bills (T-bill) yesterday after receiving substantial offers, which came with a modest pickup in yields.
The Bureau of the Treasury (BTr) made another full award at Monday’s T-bills auction as offers received reached P22.946 billion, well above the amount it wanted to raise, although lower than the P26.985 billion in tenders received a week ago.
Yields rose by less than 10 basis points (bp) on average across all tenors.
The government borrowed P4 billion worth of 91-day debt papers as market players were willing to lend as much as P4.67 billion. The auction fetched an average interest rate of 5.077%, up by 9.8 bps from the 4.979% yield fetched last week.
A full award was also made for the 182-day tenor, with the government accepting P5 billion as planned from total tenders worth P9.032 billion. Its average yield also climbed to 6.233%, some 7.4 bps higher than the 6.159% logged the previous auction.
The 364-day T-bills followed this trend as investors put forward P9.244 billion bids, allowing the Treasury to raise the full P6-billion program with an average return of 6.506%. Yields went up by 9.6 bps compared to the 6.41% rate seen during the Oct. 29 exercise.
At the secondary market yesterday, the 91-day, 182-day and 364-day T-bills were quoted at 5.154%, 5.974% and 6.574%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates.
National Treasurer Rosalia V. De Leon said the sustained rise in Treasury yields reflect market concerns ahead of the release of October inflation data, as well as an expected fresh round of tightening from the US Federal Reserve in December.
“The bids continue to increase but at least it’s already moderated,” Ms. De Leon told reporters after the auction. “I guess there is still cautiousness coming from the survey of inflation — the median continues to be…actually it plateaued, but on our end I think that inflation will trend a little bit lower than the September print.”
“There are those two events that market continues to watch out for. They are provisioning for some buffers to be able to in the bids that they submitted [yesterday], but definitely not as much as they have been doing in the past,” she added.
A BusinessWorld poll among 15 economists yielded a 6.7% median inflation forecast for October, which if realized would match the nine-year high logged in September. This compares to the 6.5% estimate given by the Finance department and falls within the 6.2-7% range given by the Bangko Sentral ng Pilipinas.
The government will release official inflation data today. Inflation averaged 5% as of September versus a 2-4% target band.
Sought for comment, a bond trader also noted that T-bill yields also mirrored rising rates for US Treasuries. The trader pointed out that appetite is stronger for the one-year papers as players seek higher profits.
Meanwhile, Ms. De Leon said the BTr “continues to be watchful” about the developments in the global market as they time their issuance of a fresh batch of dollar bonds. She noted that they are looking to issue papers due anywhere between 10 to 25 years, to be used for general funding for 2018 and possibly to pre-fund requirements for next year.

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