Amid rising rates, BTR sells ₧13.75B in Treasury bills

THE government raised P13.75 billion from its sale of Treasury Bills (T-bills) on Monday as rates continued to rise. Investors sought higher yields across all tenors, pushing the rates beyond the secondary market benchmark rates.

Of all the three tenors of debt papers, the Treasury was forced to settle at a partial award for the 364day T-bills at a rate of 3.356 percent, higher than the Bloomberg Valuation (BVAL) Service Reference Rate of 3.137 percent.

Broken down, P5 billion each in 91-day and 182-day T-bills were fully awarded while P3.75 billion was partially awarded in 364-day T-bills.

Had the Treasury decided to fully award the bids for the 364-day Tbills, the average rate would have been much higher at 3.498 percent.

“Awarding beyond 3.5 percent is excessive cushion against inflation as we saw recent drops in oil prices,” De Leon said.

Meanwhile, the 91-day and the 182-day T-bills fetched average rates of 2.273 percent and 3.143 percent, exceeding the comparable BVAL rates of 2.136 percent and 2.737 percent.

According to De Leon, investors, like “everyone,” awaited the first State of the Nation Address (SONA) of President Ferdinand R. Marcos Jr. last Monday.

“Everyone is waiting [for Marcos’s] SONA message, especially the administration’s priorities and initiatives to curb inflation rise,” De Leon said.

In a bid to rein in inflation, which has already hit a 3-year-high of 6.1 percent in June, the Bangko Sentral ng Pilipinas (BSP) earlier surprised markets with an aggressive rate hike of 75 basis points last July 14. By Monday’s auction after that move, all tenors fetched higher average yields than the benchmark secondary market rates.

Aside from the SONA, investors are also all-eyes on the conclusion of the US Federal Reserve’s 2-day policy meeting on Wednesday as the market priced a 75-basis point rate hike.

For this month, the government is set to borrow P200 billion from the local debt market.

As of end-may, the national government’s outstanding debt dipped to P12.5 trillion from a record-high of P12.76 trillion as of end-april due to its repayment of a P300 billion short-term, zero-interest loan from BSP.