Connect with us

Hi, what are you looking for?

News

Gov’t partially awards T-bills

BW FILE PHOTO

THE GOVERNMENT partially awarded the Treasury bills (T-bills) it auctioned off on Monday as traders asked for higher yields ahead of the expected rate hike by the Bangko Sentral ng Pilipinas’ (BSP) this week.

The Bureau of the Treasury (BTr) raised just P8.6 billion from the T-bills it auctioned off on Monday, below the P15-billion program, even as bids reached P24.047 billion.

Broken down, the Treasury borrowed P5 billion as planned via the 91-day securities on Monday, with bids reaching P13.7 billion. The average rate of the tenor rose by 11.4 basis points (bps) to 4.464% from the 4.35% fetch for last week’s partial award, with the government accepting offers with yields from 4.35% to 4.54%.

Meanwhile, the government awarded just P2.2 billion in 182-day T-bills, even as tenders for the tenor hit P7.147 billion, above the P5-billion program. The six-month paper fetched an average rate of 4.838%, up by 3.8 bps from the 4.8% quoted for last week’s award, with accepted rates ranging from 4.825% to 4.85%.

Lastly, the BTr borrowed only P1.4 billion via the 364-day debt papers, with demand reaching just P3.2 billion versus the P5 billion on the auction block. The average rate of the one-year paper climbed by 10 bps to 5.1% from 5% last week, with the Treasury only accepting bids with a yield of 5.1%.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 4.1094%, 4.6397%, and 5.0454%, respectively, based on the PHP Bloomberg Valuation Reference Rates data provided by the Treasury.

“Results were mixed in today’s Treasury bill auction as the Auction Committee decided to fully award bids for the 91-day T-bill while partially awarding the 182- and 364-day T-bills,” the BTr said in a press release on Monday.

A trader said in a text message that the partial award did not come as a surprise as investors wanted higher returns for the longer tenors ahead of the BSP’s policy meeting this week, where it is expected to hike rates aggressively.

“The T-bill auction average yields continued to go up week on week ahead of the widely expected local policy rate hike on Thursday. The Treasury continued to make partial awards due to high bid yields,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

“The latest increase in T-bill auction yields may have been tempered by the stronger peso exchange rate recently. Stronger-than-expected Philippine GDP (gross domestic product) data could still support local policy rate hikes, signaled to match any future Fed rate hikes,” Mr. Ricafort added in a text message.

BSP Governor Felipe M. Medalla last week said the Monetary Board will likely hike benchmark interest rates by 75 bps on Thursday to match the Fed’s latest move as it seeks to stabilize prices and support the peso.

The BSP has raised borrowing costs by 225 bps since May, bringing the policy rate to 4.25%, in a bid to rein in inflation.

Meanwhile, the Fed increased rates by 75 bps for a fourth straight time this month, bringing cumulative hikes since March to 375 bps. The federal funds rate now stands a range between 3.75% and 4%.

Expectations of an aggressive move from the BSP this week were bolstered by latest inflation and GDP data.

Philippine headline inflation surged to 7.7% in October, its quickest pace in almost 14 years, from 6.9% in September and 4% in October 2021.

For the first 10 months, inflation averaged 5.4%, still lower than the BSP’s 5.6% full-year forecast but higher than its 2-4% target.

Meanwhile, the economy expanded by 7.6% in the third quarter, slightly faster than the revised 7.5% growth in the preceding three-month period and 7% a year earlier. In the nine months to September, GDP growth averaged 7.7%.

On Tuesday, the BTr will auction off P35 billion in reissued 25-year Treasury bonds (T-bonds) with a remaining life of 11 years and 11 months.

The Treasury wants to raise P215 billion from the domestic market this month, or P75 billion through T-bills and P140 billion via T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at P1.65 trillion this year, equivalent to 7.6% of gross domestic product. — L.M.J.C. Jocson

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

REUTERS/ELOISA LOPEZ LOCAL SHARES are expected to move within a limited range this week as investors await the release of November consumer price index...

News

CRECENCIO I. CRUZ THE PESO may continue to strengthen against the dollar this week ahead of the release of November inflation data that could...

News

JULIAN ALVAREZ OF ARGENTINA — REUTERS AL RAYYAN, Qatar — Lionel Messi scored his first goal in a World Cup knockout round in his...

News

BETTINA Binaohan, Charmine Torres and Lee Sario backstopped Tchuido for the Lady Archers, who gained a separation at 61-52 midway through the fourth. —...

News

MARIE Antoinette San Diego — FIDE MARIE Antoinette San Diego has been dreaming of becoming national champion since childhood. The search for the 23-year-old...

News

LONDON — Britain’s Tyson Fury roared out a challenge to rival heavyweight world champion Oleksandr Usyk of Ukraine after retaining his WBC title with...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.