THE Bureau of Treasury (BTr) announced that it has fully awarded bids for Treasury bills (T-bills) in Monday’s action after last week’s rejection of all bids for the 182- and 364-day instruments.
Data from the Treasury showed that all T-bill tenors were oversubscribed during the auction, with the 91-day T-bills receiving the highest amount of bids.
The amount offered for the 91-day T-bills were at P5 billion, while the amount tendered hit P29.35 billion during the day. Meanwhile, both 182-day and 364-day T-bills were also offered at P5 billion each. The 182-day tenor fetched P14.17 billion tenders, while the 364-day tenor hit P11.07 billion.
Rates, on the other hand, saw mixed movement during the day. The 91-day T-bills hit a rate average of 1.38 percent on Monday, down from the 1.578 percent in the previous auction. The 182-day bills, meanwhile, fetched an average rate of 1.781 percent, up from the 1.607 percent in the previous auction. The 384-day bills’ rates were also up, from 1.792 percent to 1.883 percent in Monday’s auction.
According to National Treasurer Rosalia V. de Leon, the 91-day rates declined as higher inflation and US Fed normalization hounded the sentiments of the market.
“Finally full award. Saw rates declined in 91-day with oversubscription as market took position in the front end with faster inflation, expected surge on Fed rate and possiblerate action from the BSP [Bangko Sentral ng Pilipinas] in the second half,” de Leon said.
“Continued rate upward movements in the182- and 364-day, given higher inflation forecast this year and as BSP starts hiking policy rates,” she added.
Just last week, the BSP said it expects inflation to settle between 3.3 and 4.1 percent in March. While it did not breach the annual target, it is, however, a sure acceleration to the 3-percent inflation in February this year.
In their March monetary policy meeting, the BSP said average annual inflation could breach the upper end of the 2 to 4 percent target range in 2022 at 4.3 percent, higher than the February forecast of 3.7 percent.
Despite this, the BSP maintained its monetary policy levers at all-time lows in its latest meeting, with the governor saying they still have enough room to keep rates low and support the economy.
“The BSP continues to see scope to safeguard the momentum of economic recovery amid increased uncertainty, even as indications of sustained improvement in credit activity allows the BSP to gradually unwind its pandemic-related interventions,” the BSP said last week.
For this year, the government is expected to borrow a total of P2.2 trillion, of which around 75 percent is expected to come from domestic sources.
As of end-February this year, the government’s outstanding debt hit a new record-high of P12.09 trillion, due largely to more borrowings and the expectation of a weak currency ahead.