T-bills fetch mixed results

MANILA, Philippines — Short-term government securities yesterday fetched mixed results amid higher inflationary expectations for November, according to the Bureau of the Treasury (BTr).

During yesterday’s auction, rates for the 91-day Treasury bills (T-bills) averaged at 1.006 percent, two basis points up from the 0.986 percent recorded last week.

The P5 billion offering was fully awarded as total tenders reached P19.321 billion.

The average rate for the 182-day debt papers also inched up by 0.1 basis point to 1.386 percent from 1.385 percent a week ago. The P5 billion offering was also fully awarded.

The auction was more than four times oversubscribed with total bids amounting to P20.41 billion.

On the other hand, the 364-day securities fetched an average rate of 1.693 percent, 0.2 basis points down from 1.695 percent in the previous auction.

The BTr also made full award of the P10 billion offering, following an oversubscription of P36.175 billion.

Overall, the auction attracted P75.906 billion in tenders, P20 billion of which was accepted.

According to National Treasurer Rosalia de Leon, the auction saw mixed results, particularly with the 91-day T-bill rates increasing, due to higher inflation expectations for November.

“ There is an  increase in the 91-day due to expectations of higher inflation print in November following the spate of typhoons,” she said.

Earlier, the Bangko Sentral ng Pilipinas (BSP) said inflation likely ranged from 2.4 percent to 3.2 percent in November due to higher domestic oil prices and the impact of weather disturbances on rice and select agricultural commodities.

While the latest auction saw rates moving sideways, a bonds trader said BTr auction results are expected to remain low for the rest of the year with the BSP likely to keep rates steady or lower to support the economy.

The government is ramping up its borrowings to plug the deficit in its budget, which is now expected to widen to P1.82 trillion or 9.6 percent of the gross domestic product (GDP) due to weak revenue generation and higher spending requirements amid the coronavirus pandemic.

For December, the Treasury is planning to sell P60 billion in T-bills and P60 billion in Treasury bonds, for a total domestic borrowing program of P120 billion for the month.

The BTr is also offering the second tranche of its Premyo bonds, which will be available to the public until Dec. 11. The government is targeting to raise at least P3 billion from this issuance.