Only P5 billion raised from T-bill auction; rates rise

MANILA, Philippines — The government only made a partial award of P5 billion in short-dated Treasury bills (T-bills) as investors continue to demand higher yields.

Results were mixed during yesterday’s T-bills auction as the Bureau of the Treasury made a partial award of P5 billion out of the P15 billion on offer.

This week’s auction results were a decline from last week’s T-bills on offer – P5 billion each for three, six and 12 months – wherein the government raised P7.07 billion.

The Treasury fully awarded P5 billion for the 182-day short-dated debt papers even as rates picked up by 33.4 basis points to 3.634 percent.

However, it rejected the 91-day T-bills as rates surged by 88.8 basis points to 3.349 percent, a significant upward movement from last week’s rate of 2.318 percent.

The Treasury likewise denied all bids for the 364-day T-bills after rates averaged 4.392 percent, soaring by 41.5 basis points. It even reached a high of past five percent.

Yields for all the tenors went up on a weekly basis.

“Markets are on a wait-and-see mode on US inflation for August, but remain cautious with continuous Fed statements on the need to be restrictive to finish the job and conquer inflation,” national treasurer Rosalia de Leon said.

Overall, demand for the short-term securities dipped by 27 percent week-on-week.

Total bids reached P19.481 billion, oversubscribing the auction by 1.3 times. This is lower than last week’s P26.653 billion in demand.

By tenor, bids for the three-month, six-month and full-year securities all went down, totaling P4.65 billion, P9.975 billion and P4.856 billion, respectively.

Based on the borrowing plan for September, the government targets to raise P200 billion from the domestic debt market this month.

Of this, P60 billion will come from short-dated T-bills. The Treasury has so far raised P12.07 billion out of the target.