BTr increases T-bills offer to P22.6B, yields mixed

The government upsized its offering of short-term debt securities during Monday’s sale of Treasury bills (T-bills) even as rates sought by lenders ended mixed on the back of strong market demand.

The Bureau of the Treasury (BTr) raised P22.6 billion via T-bills, larger than its original plan of P20 billion.

Auction results showed the offering attracted P61.3 billion in total bids, 3.1 times bigger than the initial size of the issuance.

Broken down, rates for the 91-day T-bill fetched an average of 5.940 percent, more expensive than the 5.900 percent recorded in the previous auction.

READ: T-bill rates end mixed

Meanwhile, the yield on the 182-day T-bill went down to 5.989 percent from 6.093 percent previously.

The rates for the 364-day T-bill averaged 6.023 percent, cheaper than the previous week’s 6.062 percent.

Micheal Ricafort, chief economist at Rizal Commercial Banking Corp., said demand was high as some investors locked-in relatively higher yields before further local policy rate cuts in the coming months.

This after Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said that the Monetary Board (MB) is likely to ease policy rate by another 25 basis points (bps) before the year ends.

The MB last week cut its policy rate by 25 bps, reducing the key rate to 6.25 percent. This was the first rate cut in almost four years or since November 2020, during the height of the pandemic.

Meanwhile, Noel Reyes, chief investment officer for Trust and Asset Management Group at Security Bank Corp., said that the strong demand was driven by the rate cut as it “marks the start of a series of cuts till next year,” he said.

For this month, the BTr wants to raise P220 billion from the domestic market, of which P80 billion will come from T-bills and P140 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6 percent of economic output this year. INQ