BTr limits bids, accepts lower rates for 91-day IOUs

The Bureau of the Treasury (BTr) on Monday partly awarded the benchmark 91-day Treasury bills (T-bills) on lower bid rates from investors.

The Treasury’s auction committee accepted only P4.41 billion out of the P8-billion offer for the three-month debt paper at a 1.491-percent yield, down 1.4 basis points from 1.505 percent in the previous auction.

“Bid rates were below secondary market benchmarks and the decision to limit the acceptance of bids was based on the need to smoothen the profile of the government securities yield curve,” the Treasury explained in a statement.

The 91-day IOUs maturing on Jan. 6 next year were oversubscribed, attracting P12.415 billion in tenders.

As for the 182-day T-bills, a full award of P6 billion was made at 1.507 percent, down 1.9 basis points from the average rate of 1.526 percent a month ago.

The Treasury received P12.99 billion in bids for the six-month securities, which will mature on Apr. 6 next year.

The 364-day T-bills, meanwhile, were awarded at 1.878 percent or 4.3 basis points lower than 1.921 percent previously, for all the P6 billion offered during the auction.

The one-year IOUs, which will mature on Oct. 5 next year, fetched a total of P11.727 billion in bids.

The Treasury said Monday’s T-bills auction was oversubscribed across all tenors, with tenders totaling P37.132 billion. Only P16.41 billion were auctioned off out of the P25-billion offering.

It was the first Treasury auction in the fourth quarter, during which the government plans to borrow P135 billion domestically through the issuance of T-bills and T-bonds.

The Treasury will auction off P60 billion in treasury bills on top of P75 billion in treasury bonds during the last three months of this year.

The government had also programmed to sell P135 billion in debt papers for each of the first three quarters.

For the T-bills, P8 billion in 91-day, P6 billion in 182-day, and P6 billion in 364-day IOUs will be auctioned off in the fourth quarter.

As for the T-bonds, the Treasury will sell P25 billion in three-year debt papers later this month, P25 billion in five-year IOUs in November, and P25 billion in five-year securities in December.

The latest Treasury data showed that as of August, the value of outstanding debt papers issued by the national government slightly declined to P3.855 trillion as more T-bonds matured that month.

The borrowing program for this year is 75-percent domestic and 25-percent foreign.

In January, the government borrowed offshore through the sale of $2-billion worth of 25-year bonds at a record-low coupon of 3.95 percent.

Last September, the government also accepted P237 billion in illiquid state debt paper, which was intended to be swapped with new benchmark bonds due 2025 and 2040.

The government launched a domestic debt swap in August to inject more liquidity into the market amid external volatility.

Next year, the government plans to borrow P674.8 billion, lower than this year’s program of P710.8 billion.

This would bring the share of outstanding debt to the gross domestic product to a record-low of 41.8 percent.