BTR hits ₧120B March target from tender of debt papers
THE Bureau of the Treasury (BTR) has successfully raised its target amount of P120 billion for the month of March from the tender of long-term government securities on the back of easing yields.
The Treasury on Tuesday made a full award of the reissued 7-year Treasury bonds (T-bonds) worth P30 billion in an auction that reached an average rate of 6.237 percent.
The average auction yield is slightly lower than the 6.270 percent posted in the previous auction for the debt paper with the same tenor on March 5.
The investors’ average asking rate for the government security,
With a remaining term of six years and four months, the investors’ average asking rate for the government security is higher than the 6.20 percent for the 6-year PHP BVAL as of March 25.
The tender was oversubscribed 1.6 times the P30 billion offer, attracting P46.5 billion in total tenders. The reissued bond series 07-70 yields ranged from a low of 6.150 percent to a high of 6.274 percent.
This is now the fifth straight week that the Treasury made a full award of T-bonds tender, reaching its target of raising P120 billion from the sale of T-bonds this month.
“With its decision, the committee raised the full program of P30.0 billion, bringing the total outstanding volume for the series to P124.7 billion,” the Treasury said in a statement after the auction.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the 7-year T-bond average auction yield is partly due to higher US Treasury yields to among 3.5-month highs recently.
Most of the longer T-bond/php BVAL yields are still among 5-year highs that are still attractive for some investors amid the looming Fed rate cuts that could be matched locally later in 2024, according to Ricafort.
However, he noted that reduced dovish signals were seen recently from some local monetary authorities, particularly the possible lower number of local policy rate cuts from four to two cuts.
The RCBC executive also noted offsetting factors, one of which was due to the Fed ’s affirmation of the dot plot of -0.75 rate cuts for this year. He said while this was the consistent view since December 13, 2023, it reduced the estimated Fed rate cuts for 2025 to -0.75 (versus the previous estimate of -1.00).
For April, the national government plans to borrow as much as P120 billion from the tender of T-bonds, the same as the targeted amount last month. The Treasury is scheduled to hold four auctions of T-bonds with varying tenors to raise as much as P30 billion each.
The state is also targeting to raise P195 billion in April from the combined sale of T-bonds and Treasury bills (T-bills). The Treasury will tender a total of P51.050 billion worth of T-bills and P1.802 trillion worth of T-bonds this year.
Based on state budget documents, the national government aims to borrow a total of P2.46 trillion, P253 billion higher than the P2.207 trillion gross borrowing plan in 2022.