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Overwhelming demand marks auction of T-bills

This undated photo shows the Bureau of the Treasury building in Manila.

THE Bureau of the Treasury (BTr) on Monday upsized the volume of Treasury Bills (T-bills) it awarded to P30.2 billion on strong investor appetite for government securities days before monetary authorities’ policy meeting.

The primary auction was met with overwhelming demand as total tenders reached P97.2 billion, almost quadruple the P25-billion initial offering.

After seeing robust demand, the auction committee decided to double the accepted non-competitive bids for the 91-day T-bills and the 182-day T-bills.

The Treasury awarded P7 billion in 91-day T-bills, P11.2 billion in 182-day T-bills and P12 billion in 364-day T-bills.

Rates across all tenors also declined compared to previous auctions as well as to the secondary market.

National Treasurer Rosalia V. De Leon said they also opened the tap facility for an additional P7 billion in offering for the 364-day T-bills after seeing strong market presence in the auction.

De Leon said “markets see the BSP [Bangko Sentral ng Pilipinas] providing continued anchor for economic rebound,” especially if the central monetary authority will keep rates steady in its next policy meeting on May 13.

The BTr will explore ways to further tap the local market to take advantage of the low rates as well as in line with its strategy to continue positioning debt portfolio bias towards local currency, she added.

The 91-day T-bills fetched an average rate of 1.278 percent, lower by 2.8 basis points from previous auction’s 1.306 percent. Tenders for the security amounted to P23.17 billion, more than four times the initial P5-billion offer.

Meanwhile, the 182-day T-bills capped at an average rate of 1.549 percent, dropping by 8 basis points from 1.629 percent previously. The tenor attracted total bids of P31.43 billion, nearly four times the initial P8-billion offer.

The 364-day T-bills settled at an average rate of 1.829 percent, falling by 3.4 basis points from 1.863 percent in the previous auction. Total bids for the security hit P42.64 billion, more than thrice the P12-billion offer.

The national government’s outstanding debt has reached a new record-high of P10.77 trillion as of end-March this year, up by 27.1 percent from P8.48 trillion a year ago.

The country aims to borrow a total of P3.03 trillion this year, roughly the same amount it borrowed in 2020.

The national government’s debt this year is expected to reach 57 percent of gross domestic product (GDP). As of end-2020, the country’s debt-to-GDP ratio surged to 54.5 percent—a 14-year-high—coming from a record-low 39.6 percent in the previous year.

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