THE national government successfully raised its full programmed amount from the tender of Treasury bills (T-bills) after the Bureau of the Treasury (BTr) saw favorable rates on Monday.
The Treasury made a full award of its P15 billion programmed auction of three-tenor bills after the average auction yields finally corrected slightly lower for the first week after rising for 11 straight weeks.
With the results, the Treasury raised P5 billion each from 90-day T-bills, 182-day tenor, and 364-day government securities.
For the 90-day T-bills, investors’ average yield stood at 5.772 percent, versus the previous tender’s 5.778 percent. Bids for the 90-day T-bills ranged from 5.730 percent to 5.825 percent. The 182-day T-bills saw its yield averaging at 5.966 percent compared to last auction’s 5.995 percent. The government security rates were between 5.930 percent and 5.993 percent.
Investors’ average rate for the 364-day T-bills, meanwhile, was at 6.087 percent with a yield range of 6.040 percent to 6.100 percent. T-bills’ yields averaged 6.100 percent in the Treasury’s previous tender last March 4.
According to the Treasury, the auction was 3.4 times oversubscribed, attracting P50.7 billion in total tenders.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort attributed the “slightly lower” T-bill yields to the recent dovish signals of Federal Reserve (Fed) Chairman Jerome Powell and other officials that hinted of possible rate cuts later this year.
Ricafort also noted the lower T-bills yields in the context of large maturities of Retail Treasury Bonds (RTBs) worth about P700 billion. He said the latter would increase liquidity. Reinvesting part of the amount raised in government securities could further lead to lower yields, Ricafort added.
“[Treasury bills] auction yields are again mostly unusually higher [against] the comparable short-term PHP BVAL yields, but still below the comparable [Bangko Sentral ng Pilipinas’] BSP short-term interest rates,” the RCBC economist said.
The PHP BVAL yield for 90-day and 182-tenor T-bills are at 5.765 percent and 5.974 percent, respectively, except the 365-day government securities at 6.104 percent which is slightly lower than its T-bill yield counterpart.
Ricafort explained the lower T-bill yields would lower borrowing costs, such as interest rates and in government’s debt servicing.
The Treasury aims to raise as much as P60 billion in March from the sale of T-bills. It is also targeting to raise P180 billion in March from the combined sale of T-bills and Treasury bonds (T-bonds).
Based on state budget documents, the national government aims to borrow a total of P2.46 trillion, P253 billion higher than the P2.207 trillion gross borrowing plan in 2022.