First T-bill auction for 2024 upsized to P17 billion

MANILA, Philippines — The government upsized its first short-term securities auction for the year as investors’ asking rates were generally lower amid expectation of a slower inflation at the tailend of 2023.

The Bureau of the Treasury yesterday fully awarded and even upsized to P17 billion its T-bills on offer from the P15 billion original target. It was the first T-bills auction for 2024.

In particular, the Treasury upsized the 182-day offer to P7 billion from the target P5 billion.

This came even after rates for the 182-day offer increased by six basis points to 5.578 percent from the secondary rate of 5.518 percent, and was higher from the last auction’s 5.267 percent.

Nonetheless, yields for the 91 and 364-day offers declined in comparison to the reference rate.

“The auction was 2.7 times oversubscribed, attracting P39.9 billion in total tenders, prompting the committee to double the accepted volume of non-competitive bids for the 182-day T-bills,” the Treasury said.

The 91-day short-dated debt papers saw rates go down by 10.4 basis points to 5.14 percent, but above last auction’s level of 4.996 percent.

Likewise, rates averaged 5.829 percent for the 364-day T-bills – 3.8 basis points lower than the secondary rate, but also slightly up from the last auction rate of 5.732 percent.

Yields were generally lower as the market is expecting that inflation further eased in December.

Market consensus is for inflation to have eased to four percent during the last month of 2023 from 4.1 percent in November.

The Philippine Statistics Authority is set to release the December and full-year inflation data on Jan. 5.

Meanwhile, the three-month and one-year securities were both fully awarded at P5 billion each.

Demand also increased by 15 percent to P39.945 billion. The auction was oversubscribed by 2.66 times.

Bids rose to P14.36 billion and P12.225 billion for the six months and one year T-bills, respectively, but slightly went down to P13.36 billion for the 91-day offer.

For this month, the Treasury aims to borrow P195 billion from domestic creditors. Of this, P75 billion is expected to come from short-dated T-bills.