The Bureau of the Treasury fully awarded P20 billion in Treasury Bills (T-bills) on Monday despite rates going sideways.
The average rate for the 91-day T-bills declined while the rates for the 182-day and the 364-day tenors went up.
The auction was nearly three-times oversubscribed, with tenors attracting combined total tenders of P56.687 billion.
Sought for comment following the auction results, National Treasurer Rosalia V. De Leon said good demand remains with volume
received in the auction.
“Rates remain low even with adjustment on 182-day,” De Leon told reporters in a message.
The 91-day T-bills fetched a rate of 1.167 percent, 1.3 basis points (bps) down from the previous average rate of 1.180 percent . Total bids for the security reached P19.028 billion, almost four times the P5-billion offer.
Meanwhile, the 182-day T-bills posted a rate of 1.518 percent, rising by 9.7 bps from the previous rate of 1.420 percent. Tenders for the tenor amounted to P11.008 billion, more than twice the P5-billion offer.
The 364-day T-bills recorded a rate of 1.807 percent, inching up by 1.9 bps from 1.788 percent previously. The security had total bids of P26.651 billion, increasing by more than two-fold of the volume offered at P10 billion.
The sideways behavior of the rates comes after US Federal Reserve Chief Jerome Powell announced the US monetary authority would adopt a flexible average inflation targeting strategy wherein it will give itself room to loosen policy and allow inflation to rise moderately above its 2 percent target.
The Bangko Sentral ng Pilipinas also earlier announced its decision to take a “prudent pause” on monetary easing.
For this month, the Treasury programmed to borrow P160 billion from the local debt market.
The government borrows to fund its spending requirements as well as to cover its ballooning budget deficit.
As tax collections are down amid the pandemic, the Development Budget Coordination Committee (DBCC) is projecting the country’s budget deficit to more than double to 9.6 percent of gross domestic product (GDP) or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.
The DBCC also expects the country’s debt-to-GDP ratio this year to increase to 53.91 percent of GDP—a level it hasn’t seen in over a decade—from a record-low of 39.6 percent of GDP last year.