Gov’t T-bill purchase exceeds target
Bureau of the Treasury
MANILA, Philippines—The Marcos administration borrowed more than what it had planned during Monday’s offering of Treasury bills (T-bills) after rates fell for the fourth straight week.
Auction results showed the Bureau of the Treasury (BTr) awarded T-bills amounting to P27.6 billion, more than the P22 billion it originally wanted to raise.
Demand for the debt securities was so strong that the offering attracted P91.1 billion in total tenders, exceeding the original size of the issuance by 4.1 times.
That, in turn, prompted the BTr to double the accepted non-competitive bids for the three and six-month T-bills to P5.6 billion each.
But beyond demand, the Treasury was also able to upgrade its offering due to lower borrowing costs.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said yield on T-bills declined for another week amid expectations of further cuts to the local policy rate.
“Treasury bill average auction yields declined for the fourth straight week on possible local policy rate cut as early as the first rate-setting meeting of the Bangko Sentral ng Pilipinas in 2025, as earlier signaled by most local monetary officials,” Ricafort said.
The BTr said the 90-day T-bill fetched an average rate of 5.113 percent, cheaper than last week’s 5.165 percent.
Local creditors asked for an average rate of 5.488 percent for the 181-day debt note, down from 5.503 percent in the previous auction.
The average yield for the 363-day T-bill fell to 5.724 percent week-on-week from 5.840 percent before.
To note, the maturity dates across all tenors were adjusted due to holidays.
For this year, the Marcos administration aims to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion, or equivalent to 5.3 percent of the country’s gross domestic product.
By sources of financing, the government will borrow P507.41 billion from foreign sourcws in 2025. The remaining P2.04 trillion will be raised domestically, of which P60 billion will be via T-bills and P1.98 trillion via Treasury bonds.
All of these, in turn, are expected to push the government’s outstanding debt to P17.35 trillion by the end of 2025.
