BTr rejects all bids for T-bills; sets September local borrowings at P200B
The Bureau of the Treasury (BTr) on Tuesday deferred borrowing P15 billion through the sale of T-bills as it found the yields sought by creditors too high.
National Treasurer Rosalia de Leon was nonetheless optimistic that the longer tenors, including the 16-year bond it will offer in September, would attract “strong demand” from government securities eligible dealers (GSEDs) and raise a total of P200 billion next month.
In Tuesday’s auction, the last for August, the BTr rejected all bids for the 90-day, 182-day and 364-day treasury bills, worth P5 billion each, that it offered.
Had the BTr fully awarded the benchmark 90-day (minus one day as its maturity falls on a holiday) T-bill, its average rate would have climbed to 2.685 percent from 2.07 percent last week.
The yield sought by GSEDs for the 182-day IOUs averaged 3.561 percent, up from last week’s 3.336 percent.
The annual rate for 364-day securities jumped to 4.399 percent from 3.782 percent previously.
De Leon said the debt market asked for higher yields following United States Federal Reserve chair Jerome Powell’s rhetoric of “higher for longer” bank lending rates at last week’s Jackson Hole summit.
GSEDs offered to lend the BTr P17.3 billion or 1.2-times more than the amount it wanted to borrow.
In an Aug. 26 memorandum to all GSEDs made public on Tuesday, De Leon said the BTr was planning to borrow P60 billion through T-bills plus P140 billion through treasury bonds in September .As in previous months, the weekly T-bill offerings on Mondays will be composed of P5 billion each for the three- and six-month as well as one-year debt paper.
The BTr will also offer P35 billion each in bonds every Tuesday, including 3.5-year on Sept. 6; 10-year on Sept. 13; seven-year on Sept. 20; and 16-year on Sept. 27.
The government will borrow a total of P2.21 trillion this year, of which three-fourths or P1.65 trillion will be sourced locally to take advantage of a liquid financial system and temper foreign exchange risks.
Budget documents had shown that the government plans to borrow P2.2 trillion in 2023, slightly lower than this year’s.
Next year’s borrowings will include P1.65 trillion to be raised domestically, of which P1.59 trillion will come from the issuance of fixed-rate treasury bonds, while a net of P54.1 billion will be funded by short-dated T-bills (P621.1 billion in gross issuance next year offset by P567-billion maturities).
Similar to this year, 75 percent of the government’s borrowings in 2023 will be raised from the domestic debt market. while the rest composed of external financing will further go down to P553.5 billion next year.
