Government raises only P10.55 billion for T-bills

MANILA, Philippines — The government made a partial award of P10.55 billion in short-term Treasury bills (T-bills) as rates are still on an uptrend even as demand picked up after the Bangko Sentral ng Pilipinas (BSP) tightened monetary policies anew.

This now marks the 14th straight week of T-bills auction that the Bureau of the Treasury (BTr) failed to raise its intended amount of P15 billion.

As widely expected, the higher rates yesterday are an effect of another aggressive move by the BSP that brought the benchmark rate to a 14-year high of five percent.

The central bank matched the US Federal Reserve’s move as it ramps up efforts to ensure stability in the peso- dollar exchange rate.

During yesterday’s auction, rates across the board went up from secondary markets, prompting the Treasury to only partially accept offers for three, six, and 12 month tenors of T-bills.

Nonetheless, this is still an improvement from last week’s T-bills on offer, where the government only raised P8.6 billion.

Rates for the 91-day T-bills increased by 25.4 basis points to 4.475 percent. This is a downtrend from last week’s rate of 4.464 percent but is above the secondary rate of 4.121 percent.

The Treasury still made a full award for the 91-day T-bills and raised P5 billion.

Similarly, the 182-day short-dated debt papers also saw rates increase by 11.1 basis points to 4.921 percent from the reference rate of 4.81 percent but slightly down from last week’s 4.838 percent.

For the 364-day T-bills, rates averaged 5.142 percent, inching up by 8.8 basis points. This is higher than the previous auction’s rate of 5.1 percent.

The Treasury awarded P3.25 billion for the six-month tenor and another P2.3 billion for the one-year securities.

Overall demand for the short-term securities rose by 22 percent week-on-week. Total bids reached P29.452 billion, oversubscribing the auction by 1.96 times.

This is already the highest demand for T-bills since end-August when total tenders reached P30.756 billion.

Bids for the 91-day securities rose to P17.371 billion and jumped to P4.971 billion for the 12-month offer, but went down to P7.11 billion for the six-month tenor.

For November, the Treasury aims to borrow P215 billion from domestic creditors, of which P75 billion will come from short-dated T-bills.

So far, the Treasury has raised P25.85 billion out of the P75 billion.