THE national government raised nearly P10 billion on Monday from the sale of Treasury bills, kick-starting its December borrowing program with a mixed award as the Bureau of the Treasury (BTr) rejected bids seeking higher yields.
The Treasury raised a total of P9.685 billion out of its P10 billion programmed amount from the tender of three-tranche T-bills.
The Treasury offered P3 billion in 91-day T-bills, P3 billion in 182-day debt papers and P4 billion in 364-day government securities.
Due to mixed movements in investors’ asking yields, the Treasury raised P4.2 billion from the 91-day promissory notes, an upsize from its programmed offering, and P2.5 billion from 182-day T-bills.
The Treasury also borrowed P2.985 billion from the sale of 364-day debt papers.
The Treasury saw the average yield for the 91-day government security settling at 4.996 percent with a range of 4.875 percent to 5.073 percent.
The 182-day T-bills fetched rates between 5.175 percent to 5.5 percent with an average yield of 5.267 percent.
Meanwhile, the 364-day T-bills’ average yield stood at 5.732 percent with an accepted range rate of 5.5 percent to 5.988 percent.
“The auction was well received by the market, going 3.5 times oversubscribed with P34.7 billion in total tenders,” the Treasury said.
“This allowed the Committee to double the amount of non-competitive bids accepted for the 91-day T-Bill to raise P9.7 billion of the P10.0 billion offering,” the Treasury added.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort explained that the mixed results at Monday’s T-bills auction was caused by the correction in tender yields, resulting in higher yields on a week-on-week basis.
“It is important to note that most Treasury bill average auction yields are still much higher than the comparable short-term PHP BVAL yields: 3-month and 6-month T-bill yields higher by at least +0.36 [basis points], while the 364-day T-bill still slightly higher by at least +0.04 [basis points],” Ricafort said.
The secondary market benchmark rates for the three-tranche T-bills were at 5.365 percent (3-month), 5.633 percent (6-month) and 5.777 percent (1-year).
Ricafort added that the recent inaugural tenders by the Treasury of Sukuk bonds and tokenized bonds allowed it to reject bids with relatively higher asking yields.
“The partial awards may have to do with the recent debut of U.S.$1 billion sukuk bonds and P15 billion maiden 1-year tokenized Treasury bonds; both of which gave the ability to reject relatively higher bid yields,” the RCBC executive said.
For December, the Treasury plans to raise P100 billion from the tender of T-bills and Treasury bonds. The Treasury will hold two auctions of T-bills this month each with P10 billion offering and two tenders of Treasury bonds each with P20 billion programmed amount.
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