THE Bureau of the Treasury borrowed P15 billion from the local debt market as strong investor appetite for Treasury Bills (T-bills) pushed rates lower for all tenors.
Monday’s auction ended up nearly four-times oversubscribed with total submitted bids amounting to P53.6 billion.
National Treasurer Rosalia V. De Leon said they have observed lower rates and good volume turnout during the auction.
“Full award for all tenors for T-bills as rates declined and strong volume tendered,” De Leon told reporters.
Rates across the board were all lower than the previous auction and secondary market rates.
Despite strong investor demand for debt papers, De Leon said they opted not to open the tap facility for an additional offering.
The 91-day T-bills capped at an average rate of 1.031 percent, slipping by 4.7 basis points from 1.078 percent in the previous auction. The tenor attracted total bids of P19.75 billion, nearly four times the P5-billion offering.
Meanwhile, the 182-day T-bills’ average rate posted a 1.6 basis-point drop to 1.332 percent from 1.348 percent in the previous auction. Bids for the debt paper hit P18.427 billion, more than thrice the P5-billion offer.
The 364-day T-bills also registered a slightly lower average rate of 1.562 percent compared to previous auction’s 1.563 percent. Tenders for the tenor reached P15.39 billion, thrice the P5-billion offer.
For July, the Treasury has set to borrow P235 billion from the local debt market, slightly bigger than the P215 billion it programmed in June.
The Treasury is aiming to raise the amount through auctioning off P60 billion in T-Bills and P175 billion in Treasury Bonds (T-bonds).
“We released July issuance program with higher volume and longer tenors following June auction performance,” De Leon said.
For this year, the national government has programmed to borrow a total of P3.03 trillion.
About 80 percent of the amount is programmed to be raised through domestic sources while the remaining 20 percent is expected to come from foreign sources.
The national government’s total outstanding debt continued to swell to a fresh record-high of P10.991 trillion in April this year as the country resorts to more borrowings to finance its pandemic response. This was up by 2 percent from P10.77 trillion reported at the end of the year’s first quarter and it was also a 27.8 percent jump from P8.6 trillion of end-April last year.
Finance officials expect the country’s debt-to-GDP (gross domestic product) ratio this year to reach 58.7 percent. This is below the 60 percent international threshold but higher than the country’s 14-year-high debt-to-GDP ratio last year at P54.6 percent.