THE national government failed to borrow the full P15 billion from the domestic market as investors demanded higher yields for short-term debt papers.
The Bureau of the Treasury (BTr) on Monday made a mixed award during its auction of Treasury bills (T-bills), raising only P12.916 billion for the national government.
With the results, the Treasury snapped its six consecutive weeks of full awards of T-bills.
The Treasury made a full award for 91-day and 182-day T-bills but made a partial award for 364-day T-bills as yields rose for the second consecutive week.
The Treasury raised P5 billion each from the 91-day and 182-day T-bills while P2.916 billion from the 364-day T-bills.
The 91-day T-bills fetched an average yield of 5.698 percent while the 182-day government security averaged 6.023 percent. The 364-day T-bills, meanwhile, had an average interest rate of 6.215 percent.
The yields across all the three tenors of T-bills were higher compared to their previous week recorded levels and their recent secondary benchmark market levels.
The secondary benchmark market rates for the government securities were as follows: 5.705 percent for 91-day, 5.983 percent for 182-day and 6.194 percent for 364-day.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said investors upped their asking yields for the T-bills in anticipation of the faster inflation print of the country to be released this week.
“T-bill auction yields also went up recently due to hawkish signals from local monetary officials on possible local policy rate hike on or before the November 16, 2023 rate-setting meeting and could remain at similar levels in 1H 2024; ruled out cut/s in banks’ reserve requirement ratio (RRR) in 2023 or as long as monetary policy remains restrictive but a RRR cut possible in 2024 amid the need to better align with the lower RRR in other Asian countries,” Ricafort said in an interview.
The 91-day T-bills fetched rates between 5.68 percent and 5.725 percent while the investors sought yields from a low of 5.975 percent to a high of 6.054 percent for the 182-day debt paper. The 364-day T-bills saw yields ranged from 6.15 percent to 6.25 percent.
Nonetheless, the T-bills auction remained oversubscribed with total bids reaching P27.574 billion. However, demand for the T-bills was lower compared to the P40.202 billion bids recorded in last week’s auction.
The Treasury recorded the most offer for the 91-day T-bills at P10.01 billion followed by the 182-day at P9.106 billion. The 364-day T-bills had a total offer of P8.458 billion.
For October, the Treasury plans to raise P150 billion from the domestic market through the auction of P60 billion T-bills and P90 billion Treasury bonds.