T-bill rates continue to rise

MANILA, Philippines — The government failed to reach its borrowing program for short term securities this month as it only raised P48 billion, 80 percent of its intended amount, as investors’ asking rates remained on an uptrend.

The Bureau of the Treasury yesterday made a partial award of P10.581 billion in T-bills, short of the P15 billion target. This is the last T-bills auction for June.

This brought total T-bills raised for the month at P47.989 billion, which is 80 percent of the target P60 billion to be borrowed from the local debt market.

For the entire month, the Treasury made partial awards for three out of the four auctions set.

Rates were generally picking up for the past weeks in anticipation of the moves by the US Federal Reserve and the Bangko Sentral ng Pilipinas.

As such, the BSP mirrored the Fed, which finally kept rates unchanged after 10 consecutive rate increases.

The BSP, on the other hand, sustained its pause with rates still at 6.25 percent.

Yesterday’s auction is the third straight week of partial award for T-bills, with the amount raised just slightly increasing from last week.

Similarly, demand slipped for the fifth straight week, declining by five percent to P17.648 billion.

Demand also hit its lowest in nine weeks or since the P17.553 billion in April 24.

Meanwhile, rates went down for the 91-day tenor but increased for the 182 and 364-day offers.

Rates for the 91-day T-bills inched down by 0.3 basis point to 6.086 percent from the secondary rate of 6.089 percent but still above last week’s 6.029 percent.

As such, the Treasury awarded the entire P5 billion on offer for the three-month T-bills.

On the other hand, the 182-day short-dated debt papers saw rates go up by 4.8 basis points to 6.144 percent from the reference rate of 6.096 percent. This was also higher from last auction’s 6.081 percent.

Rates also averaged 6.219 percent for the 364-day T-bills, 8.9 basis points above the secondary rate and up from last week’s auction rate of 6.166 percent.

The Treasury only awarded P2.97 billion and P2.611 billion for the six months and one year tenors, respectively, out of P5 billion each.

Overall demand for the short-term securities went down by five percent to P17.648 billion from last week’s P18.605 billion. The auction was oversubscribed by 1.18 times.