Government raises almost full T-bill program in January

MANILA, Philippines — The government continues to benefit from easing rates here and abroad, allowing it to almost borrow the entire program for short-term securities in January.

The Bureau of the Treasury fully awarded yesterday P15 billion in short-term T-bills, its last offer for the month.

This brought total T-bills raised to P58.4 billion or 97.3 percent of the target P60 billion for January.

It was the first time in many months that the Treasury closed in to its target borrowing program for T-bills as rates continue to drop.

Rates were on an uptrend for most parts of 2022 following the consecutive big time rate hikes by the US Federal Reserve, which the Bangko Sentral Bank also tried to match.

This made borrowing more costly for the government, prompting it to reject most of the bids last year.

However, the US Fed has signaled its intention to slow down on its monetary policy, which should also prompt the BSP to moderate and eventually pause in its tightening.

This, as inflation is seen easing in the coming months largely due to base effects.

During yesterday’s auction, rates went down across the board, prompting a full award.

Rates for the 91-day T-bills went down by 10.1 basis points to 4.211 percent. This is below the secondary rate of 4.312 percent and slightly down from last week’s 4.25 percent.

The 182-day short-dated debt papers also saw rates decrease by 8.6 basis points to 4.912 percent from the reference rate of 4.998 percent. This was lower as well from last auction’s 4.967 percent.

For the 364-day T-bills, rates averaged 5.428 percent, down by 2.5 basis points. Yields slip in comparison for both the secondary market and last week’s auction.

Overall, demand for the short-term securities reached P62.013 billion, oversubscribing the auction by 4.13 times.

Demand jumped by 35 percent from the P45.89 billion in bids last week.

Bids across the board also went up to P22.36 billion, P19.08 billion, and P20.573 billion for 91,182, and 364 days, respectively.