THE Bureau of the Treasury raised P10 billion out of its P15 billion offering as the auction committee decided to reject bids for 364-day Treasury bills (T-bills) as investors demanded “unacceptable rates.”
The Treasury fully awarded the bids for 91-day and 182-day T-bills as rates ended up near the secondary market benchmark rates.
National Treasurer Rosalia V. De Leon told reporters they fully awarded bids for both 91-day and 182-day tenors as they “saw rates declined amid healthy demand and compressed bids close to secondary levels.”
“In contrast, full rejection for 364-day with tepid demand and unacceptable rates as market provide buffers for rate advances as hinted by the BSP [Bangko Sentral ng Pilipinas] and another aggressive 50bps [basis points] by the Fed [US Federal Reserve] to cool down inflation,” De Leon added.
Had the Treasury fully awarded bids for the 364-day T-bills, the rates would have averaged 2.716 percent, higher by 67.6bps from the comparable secondary market benchmark rate for the tenor at 2.04 percent.
The 91-day T-bills fetched an average rate of 1.46 percent, up by 0.7 basis points from the Bloomberg Valuation Service (BVAL) Reference Rate for the tenor at 1.453 percent.
For the 182-day T-bills, the average rate reached 1.812 percent, climbing by 4.4 basis points from BVAL rate for the tenor at 1.768 percent.
The auction attracted P42.88 billion in bids, making it nearly thrice oversubscribed.
For this month, the Treasury is set to borrow P250 billion from the domestic debt market, of which P175 billion is expected to come from auctioning off Treasury Bonds and another P75 billion through selling T-bills.
As of end-March, the national government’s outstanding debt has hit a new record-high of P12.68 trillion as it resorted to more borrowings after revenue collections remained weak while government spending grew.
The national government’s debt-to-GDP ratio has also risen to a 17-year-high at 63.5 percent, above the internationally recommended 60-percent threshold by multilateral lenders for emerging markets like the Philippines. It is also the highest since the country’s debt-to-GDP ratio hit 65.7 percent in 2005 under the Arroyo administration.