Treasury bill rates likely to drop
YIELDS ON Treasury bills (T-bill) on offer today will likely decline following the release of the government’s borrowing schedule for this month.
The Bureau of the Treasury (BTr) is offering P15 billion worth of T-bills on Monday, broken down into P4 billion and P5 billion in three- and six-month papers, respectively, and P6 billion in one-year debt papers.
A trader interviewed on Friday said yields on the T-bills on the auction block today will likely decline by five basis points across all tenors from the previous offer.
Last week, the Treasury made a partial award of the T-bills it offered, accepting only P17.455 billion out of the P20 billion programmed.
Rate of the 91-day securities barely moved to 5.787%, while the 182- and 364-day IOUs slid to 5.927% and 6.044%, respectively.
At the secondary market on Friday, three-month, six-month and one-year rates stood at 5.799%, 5.94% and 6.097%, respectively.
The trader said rates this week will likely decline due to the new borrowing schedule of the BTr for the April-June period.
“Supply and demand… Kung babawasan yung (If they will reduce the) supply, we can expect stronger demand from investors. Yields will be a bit lower,” she said.
The government plans to borrow P315 billion from the domestic market this quarter, broken down into P195 billion in T-bills and P120 billion through Treasury bonds.
In the new borrowing schedule, the weekly auction volume for the T-bills was reduced to P15 billion from the P20 billion in the previous quarter.
“We’ll see the yield curve correct a bit because for the second quarter… The auctions are skewed towards the long-end,” the trader added.
Meanwhile, another trader said rates of the T-bills on offer today will decline by up to 20 basis points across the board due to the lower supply.
“No other news except for CPI (consumer price index) which is expected to be lower,” the trader said.
Analysts in a BusinessWorld poll said inflation maintained its descent in March, yielding a median estimate of 3.5%, as rice and food prices dropped further.
Inflation data for the month of March will be released on Friday, April 5.
The government plans to borrow P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of the country’s gross domestic product. — Karl Angelo N. Vidal
