Treasury bill offers rejected on high rates

The government again balked at new borrowings as domestic lenders continue to offer funds at jacked-up rates, rejecting all tenders for P15 billion in Treasury bills offered to investors on Monday.

This brought back the auction committee to a no-sale stance with regard to the benchmark 91-day T-bill that ran for four weeks, interrupted only by a partial award of offers on Oct. 10.

Had they awarded all the offers for the three-month T-bills, the average rate would have jumped to 4.82 percent —an increase of 100.2 basis points from 3.819 percent in the previous award last week.

Also, the yield on the six-month T-bills would have risen by 81.1 bps to average at 5.226 percent from 4.415 percent.

Further, the interest rate on the yearlong T-bills would have gone up by 208 bps to an average of 5.862 percent from 3.782 percent.

These new would-be rates, if full awards were made, were all higher than prevailing secondary markets rates—by 145 bps than the 3.37 for three months; by 121.1 bps than the 4.015 percent for six months; and by 198.1 bps than the 3.881 percent for the one year.

For Monday’s auction, investors were ready to lend with a total of P16.303 billion against the BTr’s goal of raising P15 billion at P5 billion for each tenor.

The 91-day and 182-day T-bills were oversubscribed with tenders reaching P7.6 billion and P5.5 billion, respectively. Buyers were interested only in P3.2 billion worth of 364-day T-bills.

According to First Metro-UA&P Capital Markets Research, the national government had raised a total of P754.3 billion from January to July plus the P311.9 billion raised from retail Treasury bonds issued in August.

“The national government can [use these funds] to finance its budget deficit for the rest of the year,” they said.

“Since we don’t think the national government will reach the target P1.65-trillion deficit in 2022, its borrowing program should normalize for the rest of the year,” they added.

—Ronnel W. Domingo INQ