Government borrows P15 billion despite higher interest rates
At A Glance
- The Bureau of the Treasury raised P15 billion through the auction of Treasury bills (T-bills), with total bids reaching P44.840 billion.<br>The average interest rate for the three-month T-bills increased from 5.870 percent to 5.888 percent. The state fully awarded the P5 billion planned program.<br>The government fully awarded P5 billion for the 182-day IOUs, with total bids reaching P15.980 billion.<br>The average interest rate for the six-month T-bills swelled from 5.973 percent to 6.002 percent.<br>The Treasury raised P5 billion through the sale of 364-day debt papers, meeting the target, and total tenders reached P15.760 billion.<br>The average yield for the one-year securities inched up from 6.044 percent to 6.080 percent.
Short-term benchmark interest rates rose at the auction on Monday due to the expected delay in rate cuts by the US Federal Reserve, given the persistent inflation.
The rate for the 91-day Treasury bill (T-bills) increased to 5.888 percent from 5.870 percent during the last week’s auction. Investors were willing to buy as much as P13.1 billion of the debt papers, more than two-times the P5 billion on offer.
The Bureau of the Treasury sold all the P5 billion worth of IOUs on sale.
The rates for the 182-day T-bill also rose to 6.002 percent from 5.973 percent previously. Total tenders amounted to P15.980 billion, around three times larger than the P5 billion on offer.
Likewise, the 364-day T-bill rate went up from 6.044 percent to 6.080 percent. The government accepted all P5 billion on offer despite demand reaching P15.760 billion.
Total bids reached P44.840 billion, nearly three times oversubscribed than the total P15 billion offering, which was fully awarded.
At the second market, the rates for 91-day, 182-day, and 364-day T-bills were lower at 5.866 percent, 5.980 percent, and 6.034 percent, based on the PHP Bloomberg Valuation Reference Rates.
Michael L. Ricafort, Rizal Commercial Banking Corp. chief economist, said that the ongoing conflict in the Middle East continued to affect the interest rates which should be offset by the easing of global crude oil prices to 3-month lows and down from 5.5-month highs for the financial markets and the economy.