Treasury fully awards bonds, while yields move sideways

THE government fully awarded Treasury bills (T-bills) on Monday amid lower demands while yields moved sideways ahead of expected beyond-target inflation.

The Bureau of the Treasury awarded P25 billion in T-bills on Monday as programmed. Total bids reached P67.488 billion, more than thrice the offering but lower than the P79.33 billion in demand a week earlier.

It also opened its tap facility to offer P5 billion in one-year T-bills, National Treasurer Rosalia V. de Leon told reporters in a Viber message.

Broken down, tenders for the three-month papers reached P12.65 billion, beyond the P5-billion program but failing to beat the P22.537 billion in bids last week. The average rate for the 91-day debt papers increased by 2.6 basis points (bps) to 1.295% from 1.269% on March 29.

Meanwhile, it borrowed P8 billion as planned through 182-day T-bills, as the tenor saw bids drop to P16.712 billion from P21.507 billion in the previous auction. The six-month papers fetched an average rate of 1.646%, inching up by 3.7 bps the 1.609% quoted previously.

Lastly, the Treasury fully awarded P12-billion in one-year securities, with tenders higher at P38.126 billion from the P35.466 billion a week earlier. With this, average rate of the 364-day debt papers stood at 1.912%, down by 1.4 bps from the 1.926% the previous Monday.

“Risk aversion drove strong buying interest on haven assets particularly on front end with inflation print seen same as last month,” Ms. De Leon said.

A trader in a phone call also said investors adopted cautious sentiment as they await inflation data to be reported on Tuesday, causing T-bill yields to move sideways on Monday.

A BusinessWorld poll of 13 analysts yielded a median estimate of 4.8% for March headline inflation due to elevated food and fuel prices.

If realized, this would be quicker than the 4.7% in February and the 2.5% in the same month of 2020. It would also mean inflation beyond the 2-4% target set by the central bank for the third straight month.

The official March inflation data will be released by the Philippine Statistics Authority this Tuesday.

This April, the Treasury eyes to raise P170 billion through the local bond market by raising P100 billion in weekly T-bills and P70-billion via fortnightly auctions of T-bonds.

The government is looking to borrow P3 trillion in total this year from both domestic and external sources to help fund its budget deficit, which is seen to hit 8.9% of gross domestic product. — Luz Wendy T. Noble