T-bills fully awarded at higher interest rates
At A Glance
- The national government fully borrowed funds through short-term loans as demands lowered compared from last week's auction.<br>The Bureau of the Treasury awarded a total of P15 billion as planned. Demand for three-month, six-month, and 12-month IOUs reached P43.188 billion.<br>The interest rate for 91-day Treasury bills averaged at 5.226 percent. P5 billion in notes were raised despite the increase in interest rates.<br>The yield for the 182-day T-bills increased to 5.685 percent.<br>The interest rate for 364-day T-bills slightly swelled to 5.999 percent. The Treasury bureau secured P5 billion in loans with total tenders amounting to P16.376 billion.
The Bureau of the Treasury made a full award of the treasury bills (T-bills) it offered on Monday on the back of higher rates.
At an auction on Jan. 15, the national government raised P15 billion as planned via the T-bills it auctioned off as total bids reached P43.188 billion, more than twice the total offering.
The Treasury made a full P5-billion award of the 91-day T-bills as tenders for the tenor reached P13.752 billion.
The three-month paper was quoted at an average rate of 5.226 percent, 12.4 basis points above the 5.102 percent in the previous auction last week.
The government also raised P5 billion as planned from the 182-day securities as bids for the tenor reached P13.060 billion.
The average rate for the six-month T-bill was at 5.685 percent, up by 10.3 basis points from 5.582 percent last week.
Lastly, the Treasury borrowed the programmed P5 billion through the 364-day debt papers as demand for the tenor stood at P16.376 billion.
The average rate of the one-year T-bill also increases by 2.6 basis points to 5.999 percent from the 5.973 percent in the previous auction.
At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.34 percent, 5.60 percent, and 5.97 percent, respectively, based on PHP Bloomberg Valuation Reference Rates data.
T-bill yields increased after volatility in the U.S. dollar and peso exchange rate to two-month highs and one-month high of global oil price increase, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.
He said these could be balanced by dovish signals at the start of last week, which was the first since the rate hike cycle started in 2022, amid possible -1.00 local policy rate cuts for 2024.
In addition, he cited the appointment of Finance Secretary Ralph G. Recto “who has a good track record of being part in the legislation of major tax and fiscal reform measures for many years, thereby a good signal on sustaining further improvement on the country’s fiscal performance.”