Government raises P60 billion from sale of T-bills

MANILA, Philippines — The government managed to borrow P60 billion in short term securities this June, hitting its target for the sixth straight month.

The Bureau of the Treasury yesterday made a full award of P15 billion for the last T-bills auction for the month.

This brought total T-bills raised for the month at P60 billion, which is the entire amount programmed to be borrowed from the local debt market.

T-bill rates this month trended downward due to the dovish signals from the Bangko Sentral ng Pilipinas (BSP).

The market is also widely expecting that the BSP will keep policy rates unchanged at a 17-year high of 6.5 percent during its meeting tomorrow (Thursday) amid a distressed peso.

During yesterday’s auction, yield for the three tenors declined across the board in reference to the secondary market, but were mixed versus last week’s rate.

Rates for the 91-day offer moved down by 6.2 basis points to 5.666 percent from the 5.728 percent secondary rate but were stuck from last week’s level.

Yields averaged 5.93 percent for the 182-day T-bills, 2.8 basis points below the secondary rate but up from last week’s 5.914 percent.

The 364-day short-dated debt papers saw rates at 6.031 percent, lower by 4.7 basis points from the reference rate of 6.078 percent but down from last week’s level of 6.046 percent.

The Treasury awarded P5 billion in each tenor.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the BSP would match the US Federal Reserve’s decision two weeks ago and maintain healthy interest rate differentials.

He noted that the higher-for-longer signals from the Fed due to still elevated inflation would continue to influence the BSP.

Meanwhile, T-bill demand slightly went down by a percentage week-on-week to reach P39.795 billion. The auction was oversubscribed by 2.65 times.

Bids went down to P14.81 billion and P10.71 billion for the three and six month tenors, respectively, but increased to P14.275 billion for the one-year offer.