INQUIRER FILE PHOTO
The government’s first foray into the domestic debt market this month resulted in not a single peso being raised, as lenders sought rates that would have jacked up the yield on Treasury bills (T-bills) way above prevailing rates at the secondary market.
The auction committee led by the Bureau of the Treasury (BTr) rejected all tenders for the 91-day, 182-day and 364-day T-bills, foregoing the goal of selling a total of P15 billion or P5 billion for each tenor.
“The rates offered were untenable even after considering aggressive statements from both the United States Federal Reserve and the Bangko Sentral ng Pilipinas (BSP),” National Treasurer Rosalia de Leon told reporters.
US Fed
On Sept. 22, the US Fed raised their policy rate by 75 basis points (bps) while the BSP did so by 50 bps.
“The Treasury is still in a good position to reject [or not accept tenders] considering the national government’s revenue outperformance,” De Leon said.
BTr data show that in the eight months up to the end of August, national government revenues jumped by 18 percent to P2.4 trillion.
The Bureau of Internal Revenue saw collections rev up by 12 percent to P1.66 trillion while the Bureau of Customs showed a 36-percent surge to P559.2 billion.
Had the auction committee awarded all its offer for the benchmark three-month T-bills, the average yield would have ballooned by more than double to 4.66 percent—an increase of 234.2 bps from 2.318 percent in the previous award last Sept 5.
Yields too highAlso, the yield on the six-month T-bills would have risen by 94.4 bps to average at 4.902 percent from 3.958 percent last week.
Further, the interest rate on the yearlong T-bills would have gone up by 155.5 bps to an average of 4.937 percent from 3.782 percent last Aug. 22.
These yields, if full awards were made, were all higher than prevailing secondary markets rates—by 150.7 bps than the 3.153 percent for three months; by 106 bps than the 3.842 percent for six months; and by 103.5 bps than the 3.902 percent for the one year.