RATES OF THE Treasury bills (T-bills) to be auctioned off this week are expected to move sideways as the public offer for the retail bonds continues.

The Bureau of the Treasury (BTr) on Monday is set to raise P20 billion via T-bills, broken down into P5 billion each from 91- and 182-day debt papers and P10 billion via the 364-day instruments.

On Tuesday, the BTr will offer P15 billion in 35-day T-bills

A bond trader said the rates of the T-bills will likely move sideways as the public offer for five-year retail Treasury bonds (RTBs) continues.

Another trader said the three-month and six-month papers may fetch average rates 5-10 basis points (bps) lower than those seen at the previous auction, while the yield on the one-year T-bills could slip by 5 bps.

“While trading volume is still low mainly because of the ongoing RTB, end-user demand remains for the T-bills,” the second trader said via Viber over the weekend.

Last week, the BTr made a full award of the P20-billion in T-bills it auctioned off out of the bids worth P64.398 billion as rates declined across-the-board.

Broken down, it raised the programmed P5 billion via 91-day papers, with bids reaching P21.791 billion. The average rate went down to 1.335% from the 1.454% logged in the previous auction on July 20.

It also borrowed P5 billion as planned via the 182-day T-bills out of P16.65 billion in bids. The average rate of the six-month papers likewise dipped to 1.605% from 1.625% previously.

For the 364-day securities, it raised P10 billion as planned from P25.957 billion in tenders at an average rate of 1.758%, down from 1.77% in the previous auction.

The second trader said the average rate of the 35-day papers may settle between 1.1% and 1.2%.

If realized, this will be lower than the 1.684% fetched at the June 30 auction, which was when the BTr last made a full P15-billion award of 35-day T-bills.

At the secondary market, rates of 35-, 91-, 182- and 364-day T-bills stood at 1.293%, 1.429%, 1.606% and 1.805%, respectively, based on Bloomberg Valuation Service (BVAL) Reference Rates posted on Philippine Dealing & Exchange Corp.’s website.

The three-week public offer for five-year RTBs is set to close on Friday, Aug. 7.

The amount raised so far has already exceeded the record P310 billion in three-year retail bonds sold in February.

Noel S. Reyes, first vice-president and chief investment officer of the Asset Management Group of Security Bank Corp. said the market will also monitor the release of economic data later this week, particularly reports on headline iwnflation deemed a “non-event, but GDP (gross domestic product) could be a big disappointment.”

The Philippine Statistics Authority will report July inflation data on Wednesday, Aug. 5 and second-quarter GDP on Thursday, Aug. 6.

The government has set a P170-billion borrowing program for August. It will offer P110 billion in T-bills weekly and P60 billion in Treasury bonds to be auctioned off fortnightly.

It borrows from local and foreign lenders to plug its budget deficit seen to hit 8.4-9% of gross domestic product this year. — B.M. Laforga

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