THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday even as yields edged up following faster-than-expected inflation last month.

The Bureau of the Treasury (BTr) raised P20 billion as planned from the T-bills as the offer was nearly four times oversubscribed, with tenders reaching P74.79 billion.

Broken down, the BTr borrowed the programmed P5 billion via the 91-day debt papers as bids for the tenor hit P17.11 billion. The average rate of the three-month debt inched up by 0.9 basis point (bp) to 1.015% from the 1.006% logged in the previous auction.

The government likewise raised P5 billion as planned from the 182-day T-bills out of tenders worth P15.583 billion. The six-month securities fetched an average rate of 1.399%, climbing by 1.3 bps from the 1.386% quoted in the prior week.

Lastly, for the 363-day securities, the Treasury made a full award of its P10-billion offering as demand hit P42.097 billion. The one-year T-bills fetched an average rate of 1.695%, inching up by 0.2 bp from 1.693% last week.

National Treasurer Rosalia V. de Leon said T-bill rates remained low despite the slight uptick as the faster-than-expected headline inflation rate recorded in November is expected to be transitory due to recent typhoons.

“Liquidity is very much around and rates remain low as markets see November inflation as a one-off with recent typhoons,” Ms De Leon told reporters via Viber after the auction.

Headline inflation picked up to 3.3% last month from 2.5% in October and 1.3% in November 2019 after recent typhoons and massive floods that hit the country pushed up prices of agricultural goods.

Year to date, inflation averaged at 2.5%, still within the 2-4% target of the Bangko Sentral ng Pilipinas (BSP) as well as the 2.4%-2.6% estimate of the economic team. The BSP expects inflation to average at 2.4% this year.

Meanwhile, a bond trader attributed the slightly higher yields seen yesterday to slightly weaker but still ample demand for the securities.

“There are less tenders this week compared to previous week, indicating less demand at this really low level for T-bills. It seems that the interest is just coming from those with consistent demand for the product,” the trader said via Viber.

Total bids for last week’s T-bill auction stood at P75.906 billion.

The Treasury plans to borrow P120 billion from domestic lenders in December: P60 billion in weekly T-bill auctions and P60 billion in fortnightly Treasury bond offerings.

The BTr is also currently offering the second tranche of Premyo bonds to raise at least P3 billion, until Friday, Dec. 11.

The government wants to raise around P3 trillion this year from local and foreign lenders to help fund its budget deficit, which is expected to hit 9.6% of the country’s gross domestic product. — Beatrice M. Laforga