BTR raises P30B from T-bonds as planned

INQUIRER FILE PHOTO

MANILA  -The Bureau of the Treasury (BTr) was able to borrow as planned during Tuesday’s sale of medium-term debt paper despite the higher return sought by local creditors.

Auction results showed the BTr raised its target amount of P30 billion via reissued Treasury bonds, which have a remaining life of two years and 11 months.

The offering was met with strong demand. According to the BTr, the T-bonds attracted total bids amounting to P62.4 billion, 2.1 times larger than the original size of the issuance.

READ: Fresh retail T-bond offer coming to market

However, the average yield of the reissued T-bonds stood at 6.007 percent, more expensive than the 5.9 percent recorded in the previous auction of the comparable tenor last Jan 3.Nonetheless, the rate was lower than the 6.01 percent quoted for the same tenor at the secondary market as of Jan. 29.

“This is consistent with the upward correction in PHP BVAL (Bloomberg Valuation Service) yields and US Treasury yields since the start of January 2024, considered healthy, as the markets priced in possible Fed rate cuts later in 2024,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a commentary.

According to the Department of Budget and Management, the Marcos administration plans to borrow P1.85 trillion from domestic lenders in 2024.

READ: Gov’t unveils P585-B local borrowing plan for Q1 2024

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

Those borrowings are needed to help plug a projected budget gap of P1.39 trillion this year, which is equivalent to 5.1 percent of gross domestic product. —Ian Nicolas P. Cigaral INQ