Gov't raises P15 billion from local investors through borrowing
At A Glance
- The national government fully borrowed funds through short-term loans even as demands increased.<br>The auction for Treasury bills (T-bills) successfully raised P15 billion. The total bids received during the auction amounted to P47.505 billion.<br>The average rate for the benchmark 91-day IOUs rose to 5.461 percent. The government successfully sold P5 billion worth of three-month papers as planned.<br>The average yield on the 182-day T-bills increased to 5.873 percent. The government also awarded the full amount of P5 billion for the six-month securities.<br>The government also raised P5 billion for the 364-day securities as its average interest rate slightly declined to 6.075 percent.
The Marcos administration managed to borrow P15 billion from Filipino investors.
Despite the challenge of higher interest rates, the Bureau of the Treasury met its target of raising P15 billion through the sale of short-term IOUs, or Treasury bills (T-bills), on Monday, Feb. 5.
The total bids received for the three-, six- and 12-month debt papers during the auction amounted to P47.505 billion.
The average rate for the 91-day T-bills was at 5.461 percent, up by 6.3 basis points from 5.398 percent last week.
The Treasury made a full P5-billion award of the three-month T-bills as tenders for the tenor reached P12.985 billion.
Similarly, the average rate for the 182-day bills increased by 6.3 basis points to 5.873 percent from 5.810 percent in the previous auction.
The government was able to allocate the full amount of P5 billion for the six-month securities, with total demands reaching P13.940 billion.
Lastly, the Treasury borrowed the programmed P5 billion through the 364-day debt papers as demand for the tenor stood at P20.580 billion.
However, the average rate of the one-year T-bill slightly declined to 6.075 percent from 6.076 percent.
In the Bloomberg Valuation Service (BVAL), the yield on the three-month bill was lower at 5.442 percent, while the yield on the six-month bill stood at 5.813 percent.
The average rate for the 12-month bill was also lower in the secondary market at 6.044 percent.
Higher interest rates came after another possible tight monetary policy to ensure inflation is anchored with the central bank’s target range of 2 to 4 percent amid El Niño risk, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.
“T-bill auction yields continued to go up in recent weeks also due to the fact that BSP interest rate benchmarks are still higher such as the 1-day or overnight auction yield now higher at 6.46 percent,” he added.
Also citing the “political noises” in the government for almost a week, Ricafort said it could be a distraction to the passage of economic reforms as their progress is monitored by foreign investors, lenders, and credit rating agencies.
The Marcos administration aims to borrow P1.85 trillion from domestic lenders in 2024, where P51 billion of that amount will be raised from Treasury bills while the P1.8 trillion from weekly auctions of T-bonds