Gov't borrows P15B locally at lower interest rates
At A Glance
- The government successfully sold all offered short-term debt papers after a decrease in interest rates. The Bureau of the Treasury raised P15 billion, with total bids of P47.56 billion.<br>The government generated the targeted amount of P5 billion through the sale of 91-day T-bills, as total bids surged to P13.242 billion. The average interest rate for the three-month papers dropped from 5.671 percent to 5.552 percent.<br>The government awarded the full amount of P5 billion for the 182-day securities, with total bids reaching P15.043 billion. The average interest rate for the six-month T-bills declined from 5.986 percent to 5.966 percent.<br>The Treasury successfully raised P5 billion through the sale of 364-day debt papers, as total tenders reached P19.275 billion. The average yield for the one-year IOUs dropped from 6.334 percent to 6.198 percent.<br>Secondary market rates were quoted at 5.708 percent for 91-day T-bills, 5.988 percent for 182-day T-bills, and 6.263 percent for 364-day T-bills.
The government sold all its short-term debt papers after interest rates dropped.
On Monday, Sept. 4, the Bureau of the Treasury held a successful auction for Treasury bills (T-bills), raising P15 billion as planned. The total bids reached P47.56 billion, an oversubscription of nearly two times the target amount.
The Treasury successfully raised the offered amount of P5 billion through the sale of 91-day T-bills, with total bids surging to P13.242 billion.
The average interest rate for the three-month papers decreased from 5.671 percent in the previous week to 5.552 percent.
In addition, the national government fully awarded P5 billion for the 182-day IOUs, as total bids reached P15.043 billion.
The average interest rate for the six-month T-bills also dropped from 5.986 percent in the previous week to 5.966 percent.
Lastly, the Treasury successfully raised P5 billion through the sale of 364-day debt papers, meeting its target. Total tenders for the one-year tenor reached P19.275 billion.
The average yield for the one-year securities decreased from 6.334 percent in the previous week to 6.198 percent.
Prior to Monday's auction, the PHP Bloomberg Valuation Reference Rates indicated that the 91-day, 182-day, and 364-day T-bills were quoted at 5.708 percent, 5.988 percent, and 6.263 percent, respectively, in the secondary market.
Last week, the Treasury bureau said the government reduced its borrowing plan from domestic lenders for September.
Based on the financing program, the national government has planned to borrow P180 billion from the local market this month, 30 percent lower than the target of P225 billion set for August,
The government plans to borrow a total of P180 billion through the sale of P60 billion in T-bills and P120 billion in T-bonds for September.
To accomplish this, the bureau will conduct auctions for T-bills on four different dates: Sept. 04, 11, 18, and 25.
Moreover, the government will issue T-bonds on Sept. 05, 12, 19, and 26, with various maturities, including three-year, seven-year, 10-year, and three-year bonds. (Xander Dave G. Ceballos)