P20 billion T-bills awarded in full

MANILA, Philippines — The government awarded in full yesterday the short-term debt papers on offer, even as the market continued to demand higher rates.

The Bureau of the Treasury (BTr) made a full award of P20 billion during yesterday’s T-bill auction from total tenders of P64 billion, making the offer more than thrice oversubscribed.

To take advantage of the strong liquidity as evidenced by the strong demand, BTr will raise P5 billion more of one-year securities through its tap facility that allows dealers to access securities after the primary auction.

National Treasurer Rosalia de Leon said rates continued to rise across the board on continuing concerns with rising inflation.

“Rates continued to creep up with lingering concerns on higher inflation,” De Leon told reporters.

Inflation quickened to a fresh two-year high of 4.7 percent in February as prices of meat continued to rise and oil prices normalize coming from last year’s lows.

Consumer prices rose at a faster clip for the fifth straight month and was the fastest increase since the 5.1 percent growth in December 2018.

The average yield for the benchmark 91-day securities rose to 1.336 percent from 1.232 percent, while that for the 182-day debt papers rose to 1.718 percent from 1.527 percent a week ago.

Yield for the 364-day debt paper, meanwhile, rose to an average of 1.997 percent from 1.990 percent in the previous week.

De Leon earlier said that the market expects inflation to sustain its uptick until the second quarter.

Yields for local treasuries also continued to track the upward trend in US Treasuries that have been responding to the promise of a strong economic rebound in the US in line with the major stimulus package.

BTr offers today P30 billion from the reissue of the 10-year bonds with a remaining lifespan of nine years and three months.

A bond trader said the market would again seek higher yields from the long-term securities which was last offered on February 2 when it fetched an average rate of 3.066 percent, higher than the 2.724 quote when the debt papers were offered in August 2020.