MANILA, Philippines—The market on Monday (Dec. 13) flocked to the Bureau of the Treasury’s penultimate auction for 2021 and snapped up all of the P10 billion offered to replenish their holdings of government securities.
The Treasury raised P2 billion from the benchmark 91-day, P3 billion from 182-day, and P5 billion from 364-day debt paper.
The 91- and 182-day IOUs fetched lower average rates of 1.125 percent and 1.428 percent. Last week, their yields were 1.155 percent and 1.443 percent.
On the other hand, the 364-day’s annual rate inched up to 1.649 percent from 1.643 percent previously.
National Treasurer Rosalia de Leon said there was “strong participation, with today’s auction being the last for T-bills.”
The Treasury will still auction off P20 billion in reissued seven-year T-bonds on Tuesday (Dec. 14), but it last week rejected tenders for longer tenors due to rising bid rates. De Leon had said government securities eligible dealers (GSEDs) preferred shorter debt amid uncertainties wrought by still above-target headline inflation and the US Federal Reserve’s tapering.
On Monday, De Leon said GSEDs looked for securities to park their funds given P28.6 billion in maturing debt paper, including the P6.6 billion in one-year premyo bonds sold last year.
This year, the Treasury no longer offered premyo bonds as it also raised P360 billion from 5.5-year retail treasury bonds (RTBs) this month but needed to keep the debt-to-gross domestic product (GDP) ratio at the 59.1 percent ceiling by end-2021.
As debt accumulation outpaced economic growth during the first nine months, debt-to-GDP — which reflected capability to repay obligations — jumped to a 16-year high of 63.1 percent as of end-September, above the 60-percent threshold deemed by credit rating agencies as manageable among emerging markets like the Philippines.
De Leon said the Treasury was “making plans, but will see if January 2022 is possible” for another premyo bond offering. During the Treasury’s online RTB roadshows, many Filipinos living or working abroad expressed interest in buying premyo bonds once more.
Premyo bonds gave holders entries to win up to P1 million during the grand raffle draw, plus cars and condominium units during the quarterly raffles. These cheap debt papers were sold to retail buyers at only P500 per bond.
The final raffle draw for premyo bonds issued in 2020 will be on Thursday (Dec. 16).