THE GOVERNMENT made a full award of the Treasury bills (T-bills) offered on Monday even as rates inched up for most of the tenors amid easing inflation.

The Bureau of the Treasury (BTr) raised P25 billion as planned via the T-bills on Monday, as the offer was more than twice oversubscribed, with total bids at P54.743 billion. However, this was lower than the P64.5 billion in tenders seen at last week’s auction.

Broken down, the BTr raised P5 billion as programmed via the 91-day debt from P11.032 billion in bids. The three-month papers fetched an average rate of 1.325%, up by 3 basis points (bps) from 1.295% last week.

It also borrowed P8 billion as planned from the 182-day T-bills after the tenor attracted P15.846 billion in tenders. The average rate of the six-month instruments rose by 4.9 bps to 1.695% from 1.646% previously.

Lastly, the government made a full P12-billion award of the 364-day securities as demand reached P27.865 billion. The average yield of the one-year debt, meanwhile, dipped by 0.9 bp to 1.903% from last week’s rate of 1.912%.

“[The auction saw] good results with healthy tenders and rates within secondary levels tempered by lower inflation print in March,” National Treasurer Rosalia V. de Leon told reporters via Viber after Monday’s auction.

A bond trader said by phone that the average yields quoted for the T-bills still fell within market expectations, even with the slight increase in the rates for the 91- and 182-day papers.

Headline inflation eased to 4.5% in March from 4.7% in February, mainly on the back of a slower increase in food prices, the Philippine Statistics Authority (PSA) reported last week.

However, the February print was higher than the 2.5% seen in March 2020 and still beyond the 2-4% annual target of the central bank.

The Bangko Sentral ng Pilipinas (BSP) expects headline inflation to average 4.2% this year before easing to 2.8% in 2022. BSP officials have said the inflation path is likely to ease below the midpoint of the 2-4% target towards the fourth quarter.

BSP Governor Benjamin E. Diokno has said the central bank will remain accommodative to support economic recovery but will continue to watch out for  potential second-round inflation effects, such as wage and transport fee hikes.

The Treasury plans to raise P170 billion from the local debt market this month: P100 billion via weekly offerings of T-bills and P70 billion from fortnightly auctions of Treasury bonds.

The government is looking to borrow P3 trillion 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. — B.M. Laforga