Government borrows P15 billion from domestic market
At A Glance
- The national government fully borrowed funds through short-term loans amid higher demands.<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 P36.9 billion.<br>The interest rate for 91-day Treasury bills averaged at 5.778 percent. P5 billion in notes were raised despite the increase in interest rates.<br>The yield for the 182-day T-bills increased to 5.995 percent.<br>The interest rate for 364-day T-bills also swelled to 6.100 percent. The Treasury bureau secured P5 billion in loans with total tenders amounting to P14.160 billion.<br>For this month, the Treasury is set to borrow a total of P180 billion from the local debt market, with P60 billion coming from T-bills while the P120 billion from T-bonds Treasury bonds.
The Bureau of the Treasury borrowed P15 billion from the local debt market through its successful auction of Treasury bills (T-bills) on Monday, March 4.
Averages rates continued to move up during the auction, with all the tenors fetching slightly higher rates.
Robust investor demand also marked the auction, which was two times and a half oversubscribed as total bids reached P36.9 billion.
The 91-day T-bills’ average rate inched up to 5.778 percent from the previous auction’s 5.710 percent. Tenders for the security amounted to P9.430 billion, nearly twice the P5-billion offer.
The 182-day T-bills also fetched a higher average rate at 5.995 percent from 5.971 percent previously. Bids submitted for the tenor hit P13.310 billion, slightly equivalent to two times the P5-billion program.
As for the 364-day T-bills, the average rate settled at 6.100 percent, increasing from 6.085 percent in the last auction. Tenders submitted for the debt paper stood at P14.160 billion, about three times the P5-billion offer.
At the secondary market, the rates were lower for the 91- and 182-day securities at 5.729 percent, but higher for the 364-day at 5.958 percent, based on PHP Bloomberg Valuation Reference Rates data.
The 11th-week consecutive increase in interest rates could be due to the record-high retail treasury bond issuance of P584.86 billion, which could lead to some increase in the supply of government securities in the market for the meantime, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.
For this month, the Treasury is set to borrow a total of P180 billion from the local debt market.
Broken down, P60 billion will be raised through auctioning off T-bills while the remaining P120 billion will be generated via the sale of Treasury bonds (T-bonds).
For the first quarter of 2024, the Marcos administration plans to raise P585 billion in local borrowings, which translates to P195 billion for T-bills and P390 billion for T-bonds.