Treasury observes strong demand for short tenors


THE Bureau of the Treasury fully awarded P15 billion in Treasury bills (T-bills) as rates moved sideways.

The auction was more than twice oversubscribed as it attracted total bids amounting to P34.72 billion.

National Treasurer Rosalia V. De Leon said they have observed strong demand for the short tenors.

“Rates moved sideways with good demand for short term with supply capped at 15 billion,” De Leon told reporters.

The Treasurer said they opted not to open the tap facility auction for an additional offering of any of the tenors.

The 91-day T-bills fetched an average rate of 1.119 percent, posting an uptick of 0.6 basis points from the previous auction’s 1.113 percent. Tenders submitted for the security have reached P9.3 billion, almost twice the equivalent of P5-billion offering.

Meanwhile, the 182-day T-bills’ rate averaged lower at 1.387 percent. This is down by 0.3 basis points from 1.39 percent in the last auction. Tenders for the tenor hit P14.2 billion, nearly thrice the P5-billion offering.

Rates for the 364-day T-bills, meanwhile, slightly rose to 1.606 percent from 1.604 percent. Bids for the tenor capped at P11.22 billion, more than twice the P5-billion offer.

For this month, the Treasury is aiming to raise P200 billion from the local debt market.

This year, the national government programmed to borrow a total of P3.1-trillion, most of which is expected to be raised through domestic sources.

The government borrows to meet its spending requirements as well as to finance its budget deficit. On Monday, the Treasury revealed that the national government’s budget deficit from January to September widened to P1.14 trillion, surpassing the P879.2 billion shortfall in the same period last year. (See story on A1)

Last year, the government’s budget deficit more than doubled to a record-high 7.6 percent of gross domestic product (GDP) or P1.37 trillion, from only P660.2 billion or 3.4 percent of GDP in 2019.

From a record-low debt-to-GDP ratio of 39.6 percent in 2019, the country’s debt as a share of the economy surged to a 14-year-high of 54.6 percent in 2020 as the government ramped up borrowings to fund its Covid-response war chest.

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