THE Bureau of the Treasury awarded P21 billion in Treasury Bills (T-bills) on Monday, an upsize from the initial P15 billion offer after the auction committee decided to double accepted noncompetitive bids for all tenors.
Rates across all tenors were also lower than the previous auction and secondary market trading levels.
National Treasurer Rosalia V. De Leon attributed the drop in the rates to “steady inflation” and “good progress on vaccination.”
Inflation rates stood still at 4.5 percent in May after hitting that print in March. The government also announced including essential workers under the A4 priority group in its inoculation campaign.
“Also, US nonfarm payroll lower than expected tempering taper action from Fed [US Federal Reserve],” De Leon said.
Expectations the Fed will move to tighten monetary tack were tempered by US nonfarm payrolls data that revealed an increase of 559,000 jobs last month, below the 650,000 forecast.
The T-bills auction on Monday was also oversubscribed by more than six times as total submitted bids reached P92.5 billion.
“Liquidity further boosted with about P34 billion maturities this week and redemption of P131 billion RTB [retail treasury bonds] on June 13,” De Leon said.
The 91-day T-bills fetched an average rate of 1.176 percent, down by 5.9 basis points from previous auction’s 1.235 percent. Total bids for the security hit P26.359 billion, more than five times the initial P5-billion offer.
The 181-day T-bills’ average rate also slid to 1.422 percent, a 5-basis point drop from 1.472 percent. Total tenders reached P28.86 billion, more than five times the initial P5-billion offer.
The average rate for the 364-day T-bills stood at 1.649 percent, slipping by 7.4 basis points from 1.723 percent. Total bids for the security amounted to P37.3 billion, more than seven times the initial P5-billion offer.
For this month alone, the Treasury is aiming to borrow P215 billion from the local debt market, up by 26 percent compared to only P170 billion it programmed to borrow per month in April and May.
The bulk of the programmed domestic borrowings for June, or P140 billion, will now be raised through sale of Treasury bonds with longer tenors while the rest of the amount is planned to be raised by auctioning off P75 billion in T-bills.
For this year, the national government has set a P3.03-trillion gross borrowing program, roughly the same amount it borrowed in 2020. About 80 percent of the amount is programmed to be raised through domestic sources; the remaining from foreign sources.
The national government’s total outstanding debt continued to swell to a fresh record-high of 10.991 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.
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