Gov’t falls short of borrowing plan as rates rise

MANILA  -High interest rates once again messed up the government’s borrowing plan this week as it failed to fully raise the P15-billion target amount of short-term debt during Monday’s sale of Treasury bills.

Auction results showed the government was only able to borrow P13.2 billion via T-bills despite total tenders reaching P32.3 billion, which exceeded the original offer size by 2.2 times.

The high demand was not enough to stop yields from rising for the seventh straight week.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the Bangko Sentral ng Pilipinas’ sustained hawkish stance continued to push rates up.

Broken down, the Bureau of the Treasury was able to borrow as planned from the sale of 91-day T-bill amounting to P5 billion, despite average yield settling at 6.352 percent, up from last week’s average of 6.343 percent. It was also significantly higher than the 6.171 percent quoted for the comparable tenor at the secondary market as of Nov. 6.

Meanwhile, the government sold P4.5 billion of T-bills that are payable in 182 days, lower than the targeted amount of P5 billion. The debt paper fetched an average rate of 6.536 percent, costlier than last week’s average of 6.462 percent and the secondary market yield of 6.397 percent.

The Treasury raised P3.72 billion of 364-day T-bill from this week’s auction, well below its plan to borrow P5 billion. The government made a partial award of the tenor after average yield hit 6.591 percent, lower than last week’s average of 6.592 percent but higher than the 6.583 percent at the secondary market.

The government borrows money from creditors at home and abroad to bridge its budget gap, which is capped at P1.5 trillion this year.