T-bills suggest easing prices

INQUIRER FILE PHOTO

The national government raised P15 billion as planned with mixed results on the cost of Treasury bills compared with the previous auction, but all rates were lower than done deals at the secondary market.

This was the latest showing in the run-up to the Bureau of the Treasury’s launch on Feb. 7 of its 29th issuance of Retail Treasury Bonds (RTB 29), from which it wants to raise at least P30 billion.

On the auction held on Monday, interest rate for the benchmark 91-day bills increased by 3.4 basis points (bps) to average 4.186 percent from 4.152 percent previously.

On the other hand, the rate for 182-day bills went down further by 0.8 bp to 4.867 percent from 4.875 percent.

Also, the rate for the 364-day bills eased further by 6.2 bps to 5.292 percent from 5.354 percent.

“We had good outcomes, with rates lower than [those at the] Bloomberg Valuation Service,” National Treasurer Rosalia de Leon told reporters.

Compared with prevailing rates at the secondary market, the latest auction results settled lower.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said that aside from lenders’ anticipation of the upcoming auction of RTBs, the easing of the national government debt to 60.9 percent of gross domestic product (GDP) as of end-2022 from a 17-year high of 63.7 percent of GDP a quarter ago had led to the latest easing of the T-bill auction yields.

Ricafort said the latest results may also be related to the recent decline in global crude oil prices to nearly the lowest levels over the past month, which he said could help ease inflation and influence the Monetary Board’s next policy rate decision.

“T-bill auction yields also eased ahead of the latest inflation data that could ease from the 14-year high of 8.1 percent in December 2022,” he added.

For the three tenors, investors made available a total of P37.856 billion, with each tenor oversubscribed. However, total tenders were lower than the P61.85 billion put forward in the previous week’s auction

This week, lenders were ready to subscribe to P6.756 billion worth of 91-day bills and P10 billion worth of 182-day bills or more than twice the BTr offer.

The 364-day bills were oversubscribed by more than four times the offer, with tenders totaling P20.786 billion.

On Tuesday, Feb. 7, the BTr is launching 5.5-year RTBs that are offered to eligible dealers of government securities and holders of Treasury bonds that are maturing in the next three months.

In effect, RTB 29 that will fall due in 2028 are being made available to bondholders for exchange with the maturing T-bonds. INQ