After 11 straight auctions, T-bill rates decline
Bureau of the Treasury
MANILA, Philippines – The government was able to borrow its planned amount of short-term debt during Monday’s sale of Treasury bills (T-bills), as rates sought by local creditors fell for the first time after rising for 11 straight auctions.
The Bureau of the Treasury (BTr) raised P15 billion via T-bills, with total demand for the issuance amounting to P50.7 billion.
Auction results showed average yields for the T-bills snapped 11 straight weeks of ascent.
Apart from the robust demand, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said rates fell after the government paid P700 billion in Retail Treasury Bonds (RTB) that had fallen due early this month which, in turn, injected more liquidity into the local financial sector.
“Large maturities of RTBs would increase peso liquidity in the financial system and some of which would [be] reinvested in government securities (GS) in the market, thereby could lead to lower GS yields,” Ricafort said in a commentary.
The BTr said yields for the 90-day T-bill fell to 5.772 percent, from 5.778 percent in the previous offering on March 4.
Treasury bill yields
Meanwhile, local creditors demanded an average rate of 5.966 percent for the 182-day debt securities, cheaper than the 5.995 percent recorded in the last auction.
Average yield for the 364-day T-bill stood at 6.087 percent, lower than the 6.100 percent in the previous week.
Documents from the budget department showed the Marcos administration planned to borrow P1.85 trillion onshore in 2024. Of that amount, P672.1 billion will be raised via T-bills while P1.8 trillion will come from weekly auctions of longer-dated Treasury bonds.
READ: Gov’t unveils P585-B local borrowing plan for Q1 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.
Based on latest government forecasts, it is only in 2027 that the budget deficit, as a share of the economy, is expected to return to prepandemic level at 3.2 percent. INQ
