THE GOVERNMENT fully awarded the Treasury bills (T-bills) it offered on Monday even as rates continued to increase across the board following data showing quicker February inflation.

The Bureau of the Treasury (BTr) borrowed P20 billion as planned via the T-bills on Monday from P44 billion in bids, higher than the P41.052 billion worth of tenders seen during last week’s exercise.

Broken down, the BTr raised the programmed P5 billion from the 91-day debt papers as demand reached P14.467 billion. The three-month papers fetched an average rate of 1.139%, up by 9.9 basis points (bps) from 1.04% logged in the previous auction.

It likewise borrowed P5 billion as planned via the 182-day T-bills from P10.915 billion in bids. The average rate for the six-month debt also went up by 9 bps to 1.316% from 1.226% previously.

Lastly, the Treasury made a full P10-billion award of the 364-day securities it offered on Monday from tenders worth P18.62 billion. The one-year T-bills were quoted at 1.852%, up by 17.2 bps from the previous week’s rate of 1.68%.

National Treasurer Rosalia V. de Leon said T-bill rates increased during Monday’s auction amid lingering worries over high inflation and as local bonds track the uptrend in US Treasury yields.

“[T-bill rates increased due to the] hangover from elevated inflation with rates moving alongside uptrend of US Treasuries,” Ms. De Leon told reporters via Viber after the auction on Monday.

A bond trader shared the same view, saying concerns over quicker inflation have been pushing the debt rates up.

Consumer prices rose faster for a fifth straight month to a 26-month high in February as food prices continued to surge, the Philippine Statistics Authority (PSA) reported on Friday.

Preliminary data from the PSA showed headline inflation at 4.7% last month, picking up from 4.2% in January 2021 and 2.6% in February 2020. The February inflation result marked the fastest pace since the 5.1% in December 2018.

This brought the two-month average to 4.5%, above the central bank’s 2-4% annual target.

The BTr wants to raise P160 billion from the local bond market this month, broken down into P100 billion of T-bills to be offered weekly and P60 billion via auctions of Treasury bonds (T-bonds) every other week.

On Tuesday, the Treasury will auction off P30 billion in reissued 10-year T-bonds with a remaining life of six years and one month.

Outstanding government securities reached P6.784 trillion as of end-January, broken down into P1 trillion in T-bills and P5.784 trillion of T-bonds. The debt stock rose by 1.4% from the end-2020 level of P6.69 trillion.

The government is looking to borrow P3 trillion this year from local and foreign lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — Beatrice M. Laforga