Treasury borrows P17 billion from domestic market
At A Glance
- The national government raised the planned borrowing amount for debt papers due to lower yields.
- The interest rate for the 91-day debt papers decreased to 5.727 percent from the previous auction's 5.780 percent. The government raised the amount for the three-month securities, securing P5 billion as demands reached P21.412 billion.
- Likewise, the average interest rate for the 182-day T-bills also dropped to 5.893 percent from the previous 5.930 percent. Total demands reached P19.910 billion.
- Finally, the average rate for the 364-day T-bills shrank to 6.037 percent from 6.056 percent. The government raised the amount for the one-year securities, securing P7 billion instead of the initially planned P5 billion, as the total bids reached P18.519 billion.
The government successfully raised funds through the sale of short-term debt papers due to lower interest rates following mostly softer gross domestic product growth and inflation rate.
The national government on Monday, May 13, made a full award of all its short-term debt papers even after upsizing the 364-day tenor. Total demands totaled P59.84 billion.
The 91-day Treasury bill saw a decline to an average of 5.727 percent compared to the previous week's 5.780 percent, raising the programmed P5 billion, with total tenders reaching P21.412 billion.
At the secondary market, the yield on the three-month bill is higher at 5.782 percent, based on PHP Bloomberg Valuation Reference Rates data.
On the other hand, the average interest rate for the 182-day T-bills also shrank to 5.893 percent from the previous 5.930 percent. The planned P5 billion was fully awarded.
This is lower compared to the 5.908 percent quoted at the secondary market.
Meanwhile, the government opted to increase its borrowing from P5 billion to P7 billion for the one-year securities, as total demands reached P18.519 billion.
The interest rate for the 364-day T-bill also declined from 6.056 percent to 6.037 percent in the previous week. It is also lower than the 6.075 percent in the secondary market.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said lower yields may be attributed to favorable economic growth data which could lead to dovish signals from local monetary authorities at the coming monetary policy-setting meeting and eventually support and justify possible local policy rate cuts.