Govt sells add’l ₧5B T-bills as demand remains strong
The Bureau of the Treasury (BTR) on Monday fully awarded P20 billion in Treasury Bills (T-bills) as demand for government securities remains strong.
The auction was oversubscribed by more than four times the volume offered as tenders reached P81.8 billion.
National Treasurer Rosalia V. De Leon said following the auction turnout, they opened an additional P5 billion offering each for 182-day and 364-day T-bills.
“Full award with hefty submission, with rates aligned with secondary levels; demonstrates sustained liquidity onshore,” De Leon said.
The average rates across all tenors are lower than the previous auction and secondary-market benchmark rates.
The 91-day T-bill fetched an average rate of 1.079 percent, 0.7 basis points below the previous auction rate at 1.086 percent. Total bids for the security reached P23.44 billion, more than four times the P5-billion offer.
Meanwhile, the 182- day T- bills settled at an average rate of 1.543 percent, down by 5.4 basis points from 1.597 percent previously. The tenor attracted bids amounting to P27.576 billion, equivalent to more than five times the
P5- billion offer.
Lastly, the 364-day T-bills posted an average rate of 1.791 percent, dipping by 0.2 basis points from 1.793 percent in the previous auction. Total bids for the security reached P30.809 billion, thrice the P10-billion offer.
For this month, the Treasury is set to raise P140 billion by borrowing from the local debt market through the issuance of government securities. This is lower than the P160 billion it programmed in September.
As of end-september, gross borrowings of the national government have already reached P2.56 trillion, equivalent to more than 85 percent of the all-time high nominal P3-trillion borrowing program set by the Development Budget Coordination Committee (DBCC) for this year.
The government borrows to finance its spending requirements as well as to cover its budget deficit.
As tax collections are down amid lockdown measures against the pandemic, the DBCC is projecting the country’s budget deficit to more than double to 9.6 percent of gross domestic product, or P1.815 trillion, from only 3.4 percent of GDP ( gross domestic product), or P660.2 billion, last year.
The DBCC also expects the country’s debt-to- GDP ratio this year to increase to 53.91 percent of GDP—A level it hasn’t seen in over a decade— from a record-low of 39.6 percent of GDP last year.