Treasury fully awards ₧25B in T-bills on strong liquidity

Lights illuminate the Bureau of the Treasury building in Intramuros, Manila.

THE Bureau of the Treasury fully awarded P25 billion in Treasury Bills (T-bills) on Monday on the back of strong liquidity in the market.

The auction also ended up being oversubscribed as total bids across all tenors reached P75.8 billion, more than thrice the P25-billion offer.

National Treasurer Rosalia V. De Leon told reporters average rates across tenors moved sideways as it once again tracked US government securities.

“Liquidity remains strong with P34-billion redemption this week,” De Leon said.

She added they also opened the tap facility auction for an additional P5-billion offering for 364-day T-bills.

Despite this, the average rates for all tenors were still lower than the secondary benchmark rates.

The 91-day T-bills fetched an average rate of 1.269 percent, nearly flat compared to previous auction’s 1.27 percent. Total bids for the security amounted to P16.96 billion, more than thrice the P5-billion offer.

Meanwhile, 182-day T-bills capped at an average rate of 1.541 percent, also nearly flat compared to 1.54 percent previously. Tenders for the security hit P20.288 billion, more than twice the P8-billion offer.

Lastly, the 364-day T-bills’ average rate slid to 1.796 percent, down by 1.4 basis point from the previous auction’s 1.81 percent. Bids for the tenor reached P38.595 billion, also more than triple the P12-billion program.

For this month, the government aims to borrow a total of P170 billion from the local debt market, the same level it programmed to borrow in April. 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 country’s debt-to-GDP (gross domestic product) ratio this year is expected to still be below the 60-percent threshold.

The Cabinet-level Development Budget Coordination Committee (DBCC) slashed its growth projection for the Philippine economy this year to 6 percent to 7 percent from its previous forecast range of 6.5 to 7.5 percent due to the emergence of new Covid-19 variants and the re-imposition of stricter lockdown measures in the National Capital Region Plus during the second quarter of this year.

Socioeconomic Planning Secretary Karl Kendrick T. Chua has said the economy needs to grow an average of 10 percent in the next three quarters to achieve the low-end of the government’s target.

The Philippine Statistics Authority earlier reported that the country’s GDP contracted 4.2 percent in the first quarter of the year, marking the economy’s fifth consecutive quarter of decline.

For next year, the DBCC also downgraded its forecast for the country’s GDP growth to 7 percent to 9 percent, lower than its previous projection of 8 percent to 10 percent.

For 2023 and 2024, it also expects the economy to grow by 6 percent to 7 percent.

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