Government upsizes award of short-term IOUs
At A Glance
- The national government doubled the accepted non-competitive tenders for the 364-day Treasury bills (T-bills), raising P17 billion instead amid over-the-counter offerings for tax-exempt government-owned and controlled corporations in the previous weeks.<br>Demand for three-month, six-month, and 12-month IOUs reached P47.750 billion.<br>The interest rate for 91-day Treasury bills averaged at 5.704 percent. P5 billion in notes were raised despite the increase in interest rates.<br>The yield for the 182-day T-bills increased to 5.865 percent.<br>The interest rate for 364-day T-bills slightly swelled to 5.965 percent. The Treasury bureau secured P7 billion in loans with total tenders amounting to P18.560 billion.
The government increased the size of its offering for one-year Treasury bills (T-bills) to P7 billion, raising a total of P17 billion at Monday's auction on April 1.
The amount awarded was bigger than the initial P15 billion offering as the Bureau of the Treasury decided to accept the noncompetitive bids after some over-the-counter offerings for tax-exempt government-owned and controlled corporations in the previous two weeks.
Broken down, the Treasury awarded P5 billion each for the 91-day T-bills and 182-day T-bills and P7 billion for 364-day T-bills.
Rates also declined across the board and the auction was oversubscribed by more than two times as tenders reached P47.75 billion compared with the initial P15 billion offering.
The six-month T-bills’ average rate decreased to 5.704 percent, lower than the previous auction’s 5.710 percent. Bids for the T-bills reached P12.93 billion
As for the six-month short-term debt papers, the average rate settled at 5.865 percent, down from 5.880 percent in the last auction, while tenders submitted for the debt paper stood at P16.26 billion.
Lastly, the one-year paper was quoted at an average rate of 5.965 percent, below the 5.982 percent in the previous auction last week. Investors for the paper demanded P18.56 billion.
At the second market, meanwhile, the average rates for the 91-, 182-, and 364-day T-bills were higher at 5.73 percent, 5.92 percent, and 6.07 percent, based on the Bloomberg Valuation Service Reference Rate.
The yields, however, are still below the central bank's comparable overnight policy rate of 6.50 percent and overnight rate average auction rate at 6.664 percent.
The Inflation print for March, due this Friday, is still expected to be within the central bank’s target range of 2 to 4 percent and would still support possible local policy rate cuts later this year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
This month, the government aims to raise over P75 billion, while in May and June, the state plans targets to borrow another P60 billion for each month via T-bills sale.