Bureau of the Treasury
The government was able to fully raise its planned amount of short-term local borrowings during Tuesday’s sale of Treasury bills (T-bills) ahead of the Monetary board policy review as the market expects the central bank to keep its key rates.
The Bureau of the Treasury was able to borrow its target amount of P15 billion via T-bills as the total bids reached P39.8 billion, exceeding the original size of issuance by nearly three times.
Auction results showed the 91-day T-bill kept its average rate of 5.666 percent from last week’s auction.
READ: Treasury bill rates end mixed
Meanwhile, the yield for the 182-day paper averaged 5.930 percent, more expensive than the 5.914 percent seen in the previous auction.
The rate for 364-day T-bills edged lower to 6.031 percent, down from the previous auction’s 6.046 percent.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said yields were mixed as the Bangko Sentral ng Pilipinas(BSP) is expected to mirror the US Federal Reserve’s policy decision.
“Treasury bill average auction yields were mixed ahead of the latest BSP monetary policy-setting meeting expected to be unchanged to match the Fed’s decision to keep its rates unchanged to maintain healthy interest rate differentials,” Ricafort said in a Viber message.
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The Fed has held its key policy rates at 5.25 to 5.50 percent for a seventh straight meeting earlier this month.
The BSP raised borrowing costs by 450 basis points from May 2022, placing its key rates at 6.5 percent.
The government wants to raise P180 billion from the local market this month of which P60 billion is from T-bills and P120 billion via Treasury bonds.
The Monetary Board is set to meet on June 27 to decide its policy review.