THE GOVERNMENT fully awarded the Treasury bills (T-bills) it auctioned off on Monday as rates mostly dropped after the offer was oversubscribed.
The Bureau of the Treasury (BTr) raised P15 billion as planned from the T-bills it auctioned off on Monday as bids reached P37.786 billion, more than twice the amount on offer.
Broken down, the Treasury borrowed P5 billion as programmed via the 91-day T-bills, with tenders reaching P6.756 billion. The average rate of the three-month papers inched up by 3.4 basis points (bps) to 4.186% from the 4.152% quoted for the tenor last week, with accepted rates ranging from 4.12% to 4.245%.
The government also made a full P5-billion award of the 182-day securities as bids for the tenor reached P10.15 billion. The six-month tenor was quoted at an average rate of 4.867%, declining by 0.8 bp from the 4.875% seen the previous week, with the Treasury accepting offers with rates from 4.82% to 4.923%.
Lastly, the BTr raised P5 billion as planned from the 364-day debt papers as demand for the tenor reached P20.88 billion. The average rate of the one-year T-bill stood at 5.292%, 6.2 bps lower than the 5.354% fetched for the tenor last week. Accepted yields were from 5.27% to 5.317%
At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 4.2768%, 4.9007%, and 5.305%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.
National Treasurer Rosalia V. de Leon said in a Viber message to reporters that the government made a full award of its offer as the auction had a “good outcome, with rates lower than BVAL.”
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said T-bill rates mostly dropped on expectations of slower January inflation and ahead of the government’s retail Treasury bond (RTB) offer.
Headline inflation likely eased in January as weaker demand, the peso’s appreciation against the dollar, and slower growth in food costs offset the rise in utility rates and pump prices, analysts said.
A BusinessWorld poll of 15 economists last week yielded a median estimate of 7.6%, closer to the lower end of the 7.5% to 8.3% forecast range given by the Bangko Sentral ng Pilipinas (BSP) for January.
If realized, the median estimate will be slower than the 14-year high print of 8.1% in December but faster than the 3% print in January 2022.
January would also mark the 10th straight month that inflation surpassed the BSP’s 2-4% target.
The Philippine Statistics Authority will release January consumer price index data on Feb. 7 (Tuesday).
Meanwhile, the BTr will hold the rate-setting auction for its offer of 5.5-year retail bonds on Tuesday.
The government is looking to raise at least P30 billion from the offering, which is set to run until Feb. 17 and also includes a swap option for some bonds maturing this year.
Mr. Ricafort added that the decline in global crude oil prices on Friday also affected yield movements.
US West Texas Intermediate crude futures and Brent crude futures slid 3% on Friday.
On Monday, Brent rose 19 cents or 0.2, to $80.13 a barrel at 0502 GMT, while WTI climbed 9 cents or 0.1% to $73.48 a barrel.
The Treasury wants to raise P165 billion from the domestic market this month, or P60 billion via T-bills and P105 billion via Treasury bonds (T-bond). The T-bond borrowing program was initially at P140 billion but the government canceled a P35-billion offer scheduled on Feb. 7 to make way for the RTBs.
The government borrows from domestic and external sources to fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy