The government successfully sold all offered short-term debt papers in an auction, raising P15 billion. Total bids received amounted to P42.991 billion.
The government generated P5 billion through the sale of 91-day T-bills. The average interest rate dropped to 5.671 percent.
Additionally, the government sold P5 billion worth of 182-day securities, with total bids reaching P10.945 billion. However, yield for the 182-day T-bills slightly increased to 5.986 percent.
The government also raised P5 billion through the sale of 364-day debt papers, meeting the target. The average interest rate also marginally increased to 6.334 percent.
Prior to the auction, the secondary market rates for T-bills were 5.765 percent for 91-day, 6.000 percent for 182-day, and 6.329 percent for 364-day T-bills.
Gov’t makes full awards, borrows P15-B locally
At a glance
The national government successfully sold all the short-term debt papers it had offered, taking advantage of the relatively steady interest rates.
The Bureau of the Treasury on Tuesday, Aug. 22, met its target by raising P15 billion through an auction for Treasury bills (T-bills), with a total of P42.991 billion in bids received.
The Treasury was able to raise the planned P5 billion through the sale of 91-day T-bills, as the total tenders reached P18.164 billion.
The average interest rate for the three-month papers decreased from 5.704 percent last week to 5.671 percent.
Likewise, the government managed to sell all P5 billion worth of 182-day securities, as total bids amounted to P10.945 billion.
However, there was a slight uptick in the average yield for the six-month papers, rising to 5.986 percent from 5.945 percent in the previous week.
Lastly, the Treasury successfully raised P5 billion by selling 364-day IOUs, meeting its planned target, with a total demand of P13.882 billion.
However, there was also a slight increase in the average yield for the one-year T-bills, increasing from 6.325 percent a week ago to 6.334 percent.
In the secondary market, the PHP Bloomberg Valuation Reference Rates indicated that before Tuesday’s auction, the 91-day, 182-day, and 364-day T-bills were quoted at 5.765 percent, 6.000 percent, and 6.329 percent, respectively.
T-bills are like short-term loans that individuals and financial institutions in the Philippines give to the government.
When investors buy T-these IOUs, they are essentially lending money to the government for a brief period, usually between three months and a year.
These debt papers are considered safe because they are guaranteed by the government.
When the T-bill reaches its maturity date, investors receive their money back, and the government repays its debt.—Gabriell Christel Galang