The national government raised P10 billion out of its P15 billion target from its offering of short-term securities this week as the auction committee fought to keep rate hikes as small as possible amid a weak demand from lenders.
The committee did not issue 91-day T-bills, a full award of which would have raised the yield by 45.1 basis points to an average of 4.864 percent from last week’s 4.413 percent.
Results from this week’s auction showed an 11.7-bps rise in the average rate for the 182-day T-bills, to an average of 5.177 percent from 5.05 percent.
The increase for the 364-day T-bills was bigger at 32.2 bps, to 5.577 percent from 5.455 percent.
These marked the third auction in a row that the yields on the six-month and yearlong bills increased.
This happened as the Philippine peso fluctuated up and down the 55:$1 threshold while the US dollar was at a seasonally strong month, suggesting that lenders preferred the dollar securities market.
ING Bank said in a commentary that with the greenback set up for another seasonally strong month this March, as well as prevailing interest rates in the United States, a strong dollar would hold sway “a little longer.”
Also, Monday’s auction results were higher than corresponding rates for deals done at the secondary market.
The Bloomberg Valuation Service pegged the rates on six-month securities at 5.142 percent or 3.5 bps lower, and for the one-year securities at 5.446 percent or 13.1 bps lower.
At the auction, lenders made available a total of P22.65 billion for the T-bills.
The 182-day and 364-day T-bills were both oversubscribed, with lenders tendered a total of P9.46 billion and P9.07 billion, respectively.
Tenders for the 91-day bills did not even match the P5-billion offer, with tenders reaching only P4.12 billion.
For March, the Bureau of the Treasury (BTr) plans to borrow P205 billion through the issuance of T-bills and Treasury bonds.
The domestic borrowing program for March includes P60 billion from T-bills and P125 billion or P25 billion each from six-year, seven-year, 10-year, 13-year, and 20-year T-bonds.