Treasury bill rates rise for 7th straight week

Yields on shorter-dated government debts rose for the seventh straight week, but it did not discourage the Marcos administration from raising its planned amount of Treasury bills (T-bills) on Monday.

Auction results showed that the Bureau of the Treasury (BTr) was able to borrow P22.6 billion on Monday’s sale of T-bills, larger than the P20 billion that it had originally hoped to raise.

What allowed the BTr to borrow more than initially planned was a healthy demand from creditors that reached P51.7 billion, 2.6 times bigger than the original size of the offer.

This was despite the rates sought by local creditors rising again this week as markets braced for the impact of a second Trump presidency, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a commentary.

“Treasury bill average auction yields are again unusually slightly higher … as the markets priced in a Trump US presidency that could lead to protectionist policies,” Ricafort said, adding that a weak peso in the aftermath of the US elections may temper rate cut expectations at home.

The 91-day papers fetched an average rate of 5.631 percent per annum, higher than the 5.605 percent seen in the previous T-bills offering. Despite the higher yield, the government doubled the accepted noncompetitive bids for the tenor to P5.2 billion, leading to the higher-than-planned borrowings at the auction.

Noncompetitive bidders do not indicate any rate in their tenders and they get the resulting average rate when their bids are accepted.

Meanwhile, average yield on the 182-day debt securities rose week-on-week to 5.862 percent from 5.752 percent.

Rates demanded by creditors for the 364-day T-bills averaged 5.871 percent, higher than the 5.790 percent seen previously.

The Marcos administration aims to raise about P90 billion from the domestic market this month, of which P60 billion will come from T-bills and P30 billion from longer-dated Treasury bonds. —Ian Nicolas P. Cigaral