Treasury to auction off P150B in T-bills, T-bonds in Q4

The Bureau of the Treasury will borrow P150 billion locally through the auction of T-bills and T-bonds from October to December, a lower volume than the third quarter.

Deputy Treasurer Erwin D. Sta. Ana explained to reporters Monday that the volume of government securities to be auctioned off in the fourth quarter was lower than the current quarter’s P195-billion program “because December really is a shorter month with respect to fundraising” amid the Christmas holidays.

In a Sept. 22 memorandum to government securities eligible dealers (GSEDs), national treasurer Rosalia V. de Leon said the Treasury would sell P15 billion in T-bills – P6-billion 91-day, P5-billion 182-day and P4-billion 364-day – on Oct. 9 and 23, Nov. 13 and 27, as well as Dec. 11.

The Treasury will also offer P15-billion each in four-year T-bonds on Oct. 3 and Nov. 21; seven-year IOUs on Oct. 17 and Dec. 5; as well as 10-year debt paper on Nov. 7.

As domestic interest rates remain relatively low, the government will finance its programmed wider budget deficit equivalent to 3 percent of gross domestic product this year until 2022 through a borrowing mix of 80-percent local and 20-percent foreign.

On Monday, the Treasury awarded all the P15 billion in T-bills it offered as the auction was oversubscribed by over four times and rates fell across the board.

Tenders totaled P68.3 billion, which the Treasury attributed in a statement to “healthy market demand.”

“Average rates for the 91-, 182- and 364-day T-bills came in below secondary market levels, settling at 2.032 percent, 2.522 percent, and 2.861 percent, respectively,” the Treasury said.

The average rates were 2.088 percent, 2.564 percent and 2.92 percent, respectively, at the previous treasury bills auction two weeks ago.

Sta. Ana attributed the “very good” turnout mainly to expectations of manageable domestic inflation.

Last week, the Bangko Sentral ng Pilipinas’ Monetary Board kept the policy rate or overnight reverse repurchase facility at 3 percent, while also maintaining the overnight lending and deposit facilities.

The Monetary Board, the BSP’s highest policymaking body, had also left the reserve requirement ratios unchanged, as it deemed that “the inflation environment remains manageable” such that the rate of increase in prices of basic goods was seen settling within the government’s 2-4 percent target range in the next three years.

/atm