Treasury makes partial T-bill award

MANILA, Philippines — The government made a partial award of P8.6 billion in short-term securities as investors demanded higher yields ahead of the rate setting of the Bangko Sentral ng Pilipinas (BSP) this week.

The Bureau of the Treasury partially awarded P8.6 billion in short-term T-bills, with rates picking up just a few days before the BSP is expected to raise interest rates by 75 basis points.

This still marks the 13th straight week of T-bills auction that the Treasury failed to raise its intended amount of P15 billion.

The BSP is expected to be aggressive on Nov. 17, penciling in a 75-basis-point rate hike, matching the monetary policy move of the US Federal Reserve early this month.

Inflation has yet to cool down after soaring to a 14-year high of 7.7 percent in October.

During yesterday’s auction, rates across the board went up from secondary markets, as well as from last week’s offering, prompting the Treasury to only partially accept offers for three, six and 12-month tenors of T-bills.

Nonetheless, this is still an improvement from last week’s T-bills on offer, where the government raised only P6.7 billion.

Rates for the 91-day T-bills increased by 35.5 basis points to 4.464 percent. This is an uptrend from last week’s rate of 4.35 percent and is above the secondary rate of 4.109 percent.

The Treasury still made a full award for the 91-day T-bills and raised P5 billion.

Similarly, the 182-day short-dated debt papers also saw rates increase by 19.8 basis points to 4.838 percent from the reference rate of 4.64 percent and slightly up from last week’s 4.8 percent.

For the 364-day T-bills, rates averaged 5.1 percent, inching up by 5.5 basis points. This is higher than the previous auction’s rate of five percent.

The Treasury awarded P2.2 billion for the six-month tenor and another P1.4 billion for the one-year securities.

Overall demand for the short-term securities rose by 12 percent week-on-week. Total bids reached P24.047 billion, oversubscribing the auction by 1.6 times.

This is already the highest demand for T-bills since early September when total tenders reached P26.653 billion.

Bids for the 91-day securities rose to P13.7 billion, but went down for the six and 12 months offer at P7.147 billion and P3.2 billion, respectively.

For this month, the Treasury aims to borrow P215 billion from domestic creditors, of which P75 billion will come from short-dated T-bills.

So far, the Treasury has raised P15.3 billion out of the P75 billion.