Government borrows P15 billion despite higher rates
At A Glance
- The Bureau of the Treasury raised P15 billion through the auction of Treasury bills (T-bills), with total bids reaching P39.94 billion.<br>The average interest rate for the three-month T-bills swelled from 5.704 percent to 5.772 percent.<br>The government fully awarded P5 billion for the 182-day IOUs, with total bids reaching P15.036 billion.<br>The average interest rate for the six-month T-bills increased from 5.865 percent to 5.885 percent.<br>The Treasury raised P5 billion through the sale of 364-day debt papers, meeting the target, and total tenders reached P14.57 billion.<br>The average yield for the one-year securities decreased from 5.965 percent to 5.993 percent.<br>Prior to the auction, the secondary market rates were 5.753 percent for the 91-day T-bills, 5.894 percent for the 182-day T-bills, and 6.006 percent for the 364-day T-bills.
Investors pressed for an increase in Philippine benchmark interest rates for short-term loans following the rise in inflation rate and hawkish signals from monetary officials.
At the Treasury bureau’s auction on Monday, April 8, the national government successfully raised P15 billion through the sale of 91-, 181-, and 364-day IOUs amid investors seeking higher returns for buying those securities.
The total bids received were P39.94 billion, more than twice the target amount.
The average interest rate for the three-month papers picked up from 5.704 percent in the previous week to 5.772 percent.
The government accepted P5 billion worth of bids for the 91-day Treasury bills, even as investors were willing to buy as much as P10.333 billion of the debt papers.
Furthermore, the national government successfully awarded the full amount of P5 billion for the 182-day T-bills, with total bids reaching P15.036 billion.
The interest rate for the six-month T-bills also increased from 5.865 percent in the previous week to 5.885 percent.
The yield for the 364-day T-bill also inched up to 5.993 percent from 5.965 percent. Treasury accepted P5 billion worth of bids. Investors, however, were willing to buy more, as tenders reached P14.570 billion.
Before Monday's auction, the PHP Bloomberg Valuation Reference Rates showed that the 91-day, 182-day, and 364-day T-bills were quoted at 5.753 percent, 5.894 percent, and 6.006 percent, respectively, in the secondary market.
The inflation readout for March climbed to 3.7 percent from 3.4 percent, prompting the central bank to extend its pause on any rate adjustments.
Higher yields also due to the US dollar and peso exchange rate hovering among two-month highs at 56.40 levels that could lead to some pick up in import prices and overall inflation.
According to the financing program, the national government aims to borrow a total of P585 billion from the local market this year between April and June 2024.
Of this amount, over P195 billion will be obtained through the issuance of Treasury bills, while the remaining P390 billion will be raised via the sale of Treasury bonds.
For April, the government is set to generate a total of P75 billion through five T-bills auctions.