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The government made a full award of the Treasury bills (T-bills) it auctioned off on Monday on stable demand as investors continue to prefer to park their funds in short-term papers amid inflation fears.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Monday as total tenders reached P34,721 billion, more than double the initial offer but lower than the P36.088 billion in bids logged in the previous auction.

Broken down, the BTr raised P5 billion as planned via the 91-day debt papers from P9.3 billion in bids. The three-month T-bills fetched an average rate of 1.119%, up by 0.6 basis point (bp) from the 1.113% seen at last week’s offering.

The BTr also borrowed P5 billion as programmed from the 182-day securities it offered on Monday as bids reached P14.201 billion. The average rate of the six-month T-bills slipped 0.3 bp to 1.387% from 1.39% a week ago.

Lastly, the government made a full P5-billion award of the 364-day T-bills as the tenor attracted tenders worth P11.22 billion. The average yield of the one-year instruments stood at 1.606%, up by 0.2 bp from the 1.604% fetched last week.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that rates moved sideways on the back of good demand for the short-term papers due to their limited supply.

The BTr is only offering P15 billion in T-bills weekly.

Meanwhile, a bond trader in a Viber message noted that Monday’s auction result was “nothing new” as the rates fetched reflect the bids are client-driven.

“We expect it to remain the same moving forward,” the trader said.

A second trader said T-bill yields moved sideways from the previous auction “supporting the bear steepening trend of the GS (government securities) yield curve due to rising inflationary expectations.”

“Global oil prices continued to hover at their highs, while domestically, we continue to observe nine consecutive weeks of oil price hikes,” the second trader added.

Global oil prices climbed on Monday amid tight supply and strong fuel demand in the United States and other economies rebounding from the effects of the pandemic, with US crude hitting a seven-year high, Reuters reported on Monday.

Brent crude rose 0.83% to $86.24 a barrel, while US crude rose 0.80% to $84.51.

At the secondary market, the 91- 182- and 364-day T-bills were quoted at 1.2296%, 1.4582% and 1.6104%, respectively, before the auction, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

On Tuesday, the BTr will offer P35 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and nine months.

The Treasury bureau is looking to raise P200 billion from the local market this month: P60 billion from weekly offerings of T-bills and P140 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion from local and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. — Jenina P. Ibañez with Reuters