Btr upsizes T-bill awards to P22B, rates go sideways

THE Bureau of the Treasury has upsized the volume of Treasury Bills ( T-bills) it awarded to P22 billion as rates went sideways ahead of the Bangko Sentral ng Pilipinas’s policy meeting on Thursday.

The Treasury decided to double the accepted noncompetitive bids for the 90- day T- bills to P4 billion as Monday’s auction was oversubscribed by nearly 3.6x as total tenders reached P71.9 billion.

Compared to the rates in the previous auction, average rates for both 90-day and 182-day securities dropped while the average rate for 364- day Tbills went up.

“There is still good liquidity as shown by high bid to cover. But given expectations for a pause on policy rates, slight movement in one year,” National Treasurer Rosalia V. de Leon told reporters in a message.

The 90- day T-bills fetched an average rate of 1.121 percent, down by 3.5 basis points from 1.156 percent in the previous auction. The security fetched total tenders amounting to P26.580 billion, more than five times the initial P5-billion offer.

According to the Treasury, the maturity for the security was adjusted a day earlier as December 30 falls on a holiday.

For the 182- day T- bills, the average rate settled at 1.601 percent. This is lower by 1.4 basis points from 1.615 percent previously. Bids for the security reached P15.683 billion, equivalent to more than thrice the P5- billion offer.

Lastly, the 364- day T-bills posted an average rate of 1.858 percent, inching up by 0.8 basis point from 1.85 percent previously. The tenor attracted bids amounting to P29.678 billion, nearly thrice the P10 billion offer.

For this month, the Treasury is set to borrow a total of P160 billion from the local debt market this month. This is slightly lower than the P170 billion it programmed in August.

As of end- August, gross borrowings of the national government have already reached P2.47 trillion, equivalent to more than 80 percent of the all- time high P3- trillion borrowing program set by the Development Budget Coordination Committee ( DBCC) for this year amid the Covid- 19 pandemic.

The government borrows to finance its spending requirements as well as to cover its budget deficit.

As tax collections are down amid the pandemic, DBCC is projecting the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP 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—level that it has not seen in over a decade —from a record-low of 39.6 percent of GDP last year.