THE state successfully reached its target of borrowing P60 billion this month from the domestic market through the tender of Treasury bills (T-bills) as average auction yields continued to ease week-on-week.
The Bureau of the Treasury (BTr) on Monday fully awarded its P15 billion programmed auction of three-tenor bills after the average auction yields corrected slightly lower for the third straight week.
According to the Treasury, the auction committee raised P5 billion each from 91-day T-bills, 182-day tenor, and 364-day government securities.
The auction was 3.4 times oversubscribed, attracting P50.5 billion in total tenders. The bids were higher than the previous week’s P47.245 billion demand, data from the Treasury showed.
Average auction yields are all lower than prevailing secondary market benchmarks, the Treasury added.
For the 91-day T-bills, investors’ average yield decreased to 5.710 percent, versus the previous tender’s 5.744 percent. Bids for the 91-day T-bills inched down, ranging from 5.660 percent to 5.775 percent.
The 182-day T-bills saw its yield averaging at 5.880 percent compared to last auction’s 5.916 percent. The government security rates were between 5.850 percent and 5.900 percent.
Investors’ average rate for the 364-day T-bills, meanwhile, was at 5.982 percent with a yield range of 5.950 percent to 5.997 percent. T-bills’ yields averaged 6.033 percent in the Treasury’s previous tender last March 18.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said T-bills average auction yield corrected slightly lower for the third straight week after some dovish signals from local monetary authorities since last week on possible local policy rate cuts and possible further cut in banks’ reserve requirement ratio (RRR).
“T-bill average auction yields continued to be slightly lower week-on-week after some relief on the markets due to the (US Federal Reserve) Fed’s reiteration on March 20, 2024 rate-setting meeting/decision on the possibility of [three] Fed rate cuts (-0.25 each for a total of -0.75) for 2024, consistent view since the Fed’s pivot towards Fed rate cuts since December 13, 2023, as supported and justified by easing headline inflation towards central bank targets,” Ricafort said.
The RCBC executive also noted the T-bill average auction yields are again slightly lower versus the comparable short-term BVAL yields as of March 22, 2024.
The PHP BVAL yield for 3 months is at 5.77 percent, the 6-month at 5.92 percent, and the 1-year is at 6.06 percent.
However, T-bill average auction yields are further below the comparable Bangko Sentral ng Pilipinas’ (BSP) short-term interest rates, Ricafort noted.
The overnight policy rate is at 6.50 percent while the overnight average auction rate is at 6.501 percent.
Meanwhile, BSP’s 28-day and 56-day securities average auction yields are at 6.7 percent levels while BSP’s 7-day and 14-day Term Deposit Auction Facility (TDF) average auction yields are at near 6.6 percent levels.
Next month, the Treasury aims to raise as much as P75 billion from the sale of T-bills. It is also targeting to raise P195 billion in April from the combined sale of T-bills and Treasury 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.