Government borrows P15 billion locally despite low demand
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 P47.250 billion.<br>The government generated the targeted amount of P5 billion through the sale of 91-day T-bills, as total bids quoted at P14.210 billion. The average interest rate for the three-month papers dropped from 5.772 percent to 5.744 percent.<br>The government awarded the full amount of P5 billion for the 182-day securities, with total bids reaching P12.670 billion. The average interest rate for the six-month T-bills declined from 5.966 percent to 5.916 percent.<br>The Treasury successfully raised P5 billion through the sale of 364-day debt papers, as total tenders reached P20.370 billion. The average yield for the one-year IOUs dropped from 6.087 percent to 6.033 percent.<br>Secondary market rates were quoted at 5.773 percent for 91-day T-bills, 5.958 percent for 182-day T-bills, and 6.020 percent for 364-day T-bills.
The Bureau of the Treasury (BTr) has fully awarded all tenors during the Treasury bills (T-bills) auction on Monday with a total of P15 billion as demand for the government paper was seen to be weak.
The total bids reached P47.250 billion, an oversubscription of more than three times the target amount but lower than the offer in the previous auction.
The Treasury successfully raised the offered amount of P5 billion through the sale of 91-day T-bills, with total bids surging to P14.210 billion.
The average interest rate for the three-month papers decreased from 5.772 percent in the previous week to 5.744 percent.
In addition, the national government fully awarded P5 billion for the 182-day IOUs, as total bids reached P12.670 billion.
The average interest rate for the six-month T-bills also dropped from 5.966 percent in the previous week to 5.916 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 P20.370 billion.
The average yield for the one-year securities decreased from 6.087 percent in the previous week to 6.033 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 higher which were quoted at 5.773 percent, 5.958 percent, and 6.020 percent, respectively, in the secondary market.
The T-bill average auction yields, however, are further below the comparable Bangko Sentral ng Pilipinas (BSP) overnight policy rate which was kept at 6.50 percent, and the overnight rate average auction rate at 6.5018 percent.
The monetary board made this decision ”to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”
The February inflation readout increased to 3.4 percent, after a four-month slowdown, on the back of rice prices surge.