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Treasury bill rates inch higher ahead of retail bond offering

THE GOVERNMENT made a full award of the Treasury bills it offered on Monday. — BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Monday as rates inched up ahead of the start of its retail bond offer.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Monday as total tenders reached P37.99 billion, or more than double the initial offer but lower than the P42.52 billion in bids logged in the previous auction.

Broken down, the BTr raised P5 billion as planned via the 91-day debt papers from P11.34 billion in bids. The three-month T-bills fetched an average rate of 1.15%, up by 0.7 basis point (bp) from the 1.143% seen at last week’s offering.

The BTr also borrowed the programmed P5 billion from the 182-day securities it offered on Monday as bids reached P113.07 billion. The average rate of the six-month T-bills went up 1.2 bp to 1.413% from 1.401% a week ago.

Lastly, the government made a full P5-billion award of the 364-day T-bills as the tenor attracted tenders worth P13.58 billion. The average yield on the one-year instruments stood at 1.621%, up by 0.5 bp from the 1.616% fetched last week.

At the secondary market prior to the auction, the 91- 182- and 364-day T-bills were quoted at 1.2133%, 1.4391% and 1.6575%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that rates moved sideways as the market expects the Bangko Sentral ng Pilipinas (BSP) to keep borrowing costs steady at its meeting this week.

Twenty economists in a BusinessWorld poll held last week unanimously forecast that the BSP’s policy-setting Monetary Board would maintain the overnight reverse repurchase rate at a historic low of 2% during its Nov. 18 meeting to continue supporting the Philippine economy’s recovery.

Despite the stronger-than-expected gross domestic product growth in the third quarter, analysts think there is still a need to keep an accommodative policy stance because recovery has yet to firm up.

Meanwhile, a bond trader said in a Viber message that “yields are just a bit higher ahead of the RTB (retail Treasury bond) pricing [on Tuesday].”

The BTr will offer 5.5-year RTBs to raise at least P30 billion ($603 million), with a swap offer for bonds falling due in 2022, it said on Friday.

The offer will be launched on Tuesday and follows the government’s first onshore retail dollar bond issue that raised $1.6 billion in September, helping boost funding for government programs to support the economy’s recovery.

The offer period is set to run from Nov. 16 to Nov. 26, unless the BTr closes it early. The papers will be issued on Dec. 2 and will mature by 2027.

The government previously planned to raise P200 billion from the domestic market in November: P60 billion via weekly T-bill auctions and P140 billion from weekly offers of Treasury bonds (T-bonds). However, the BTr cancelled the auctions of P35 billion each in five-year and seven-year T-bonds on Nov. 16 and 23 to give way to its RTB offering.

The government wants to borrow P3 trillion from local and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. — Jenina P. Ibanez

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