T-bills offer upsized to P19B on strong demand

MANILA  —The government upsized its offering of short-term debt securities during Monday’s sale of Treasury bills (T-bills) despite the higher rates sought by lenders, as the offering was met with strong demand.

The Bureau of the Treasury (BTr) raised P19 billion via T-bills, larger than its original target of P15 billion.

Auction results showed the offering attracted P46.9 billion in total bids, 3.1 times bigger than the initial size of the issuance.

The BTr accepted some of the excess demand despite rates rising for the third straight auction.

Higher oil prices

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said local creditors demanded higher yields after an uptick in global crude prices amid tensions at the Red Sea with Houthi rebels stoked concerns of an increase in local pump prices.

“T-bill average auction yields again corrected slightly higher after global crude oil prices corrected to 1-week highs recently amid tensions at the Red Sea with Houthi rebels recently that could increase shipping costs and could lead to some shipping delays,” he said.

READ: Global maritime trade sails into geopolitical storm

That was “offset” by Finance Secretary Benjamin Diokno’s signal of a possible 100-basis point cut in the policy rate after inflation eased back to within the central bank’s 2 to 4 percent target in December, Ricafort added.

Broken down, rates for the 91-day T-bill averaged 5.102 percent, cheaper than the 5.140 percent seen in the previous auction last Jan. 2.

Borrowings

The 182-day paper fetched an average yield of 5.582 percent, higher than the 5.578 percent recorded last week.

The rates for the 364-day T-bill averaged 5.973 percent, more expensive than the previous week’s 5.829 percent.

Documents from the budget department showed the Marcos administration plans to borrow P1.85 trillion onshore in 2024.

Of that amount, P51 billion will be raised via Treasury bills while P1.8 trillion will come from weekly auctions of T-bonds.

READ: PH budget deficit seen further narrowing in 2023, 2024

Those borrowings are needed to help plug a projected budget hole of P1.39 trillion this year, which is equivalent to 5.1 percent of gross domestic product. INQ