THE Bureau of the Treasury awarded P17 billion in Treasury bills (T-bills) on Monday, an upsize from its P15 billion initial offering.
The auction was more than four times oversubscribed, with the tenors attracting a total of P63.9 billion in total bids. This prompted the auction committee’s decision to double the non-competitive bids for the 364-day T-bills to P4 billion.
Meanwhile, rates also moved ended up moving sideways during the auction.
National Treasurer Rosalia V. De Leon said “it seems” the rates moved sideways pinning the trend on investor behavior as remaining unfazed of forecasts inflation is rising faster.
Likewise, De Leon sees the market is still swimming in cash—“Liquidity very much around”—with P22 billion in maturities this week. The Treasurer note, however, that “placements remain in short tenor buckets.”
Asked whether the Treasury will be taking advantage of strong liquidity for its borrowings from the local debt market in October, De Leon said volume “may still be the same.”
For this month, the Treasury is set to borrow a total of P250 billion from the local debt market, higher than the P200 billion program in August.
Broken down, P175 billion will be raised through auctioning off Treasury bonds while the remaining P75 billion will be generated via the sale of T-bills.
In Monday’s auction, the 91-day T-bills fetched an average rate of 1.06 percent, a slight increase from 1.07 percent. Tenders for the tenor reached P17.24 billion, more than thrice the P5-billion offer.
As for the 182-day T-bills, the average rate settled at 1.385 percent, a 0.4 basis point drop from 1.389 percent. Total submitted bids for the debt paper amounted to P21.51 billion, more than quadruple the P5-billion offer.
Likewise, the 364-day T-bills’ average rate slipped to 1.582 percent, falling by 1.5 basis points from previous auction’s 1.597 percent. Bids for the security hit P25.12 billion, five times the equivalent of the initial P5-billion offer.
This year, the national government programmed to borrow a total of P3.1-trillion, most of which is expected to be raised through domestic sources.
The government borrows to meet its spending requirements as well as to finance its budget deficit.
As of end-July this year, the national government’s outstanding debt has already piled up to a new record-high of P11.61 trillion, swelling by 26.7 percent from P9.16 trillion a year ago.