Despite uptick in yields, NG meets target for T-bills

THE national government successfully raised its full programmed amount for the tender of Treasury bills (T-bills) despite average auction yields rising for the second straight week.

The Bureau of the Treasury (BTR) fully awarded its P15 billion programmed auction of three-tenor bills as the average auction yields slightly increased for the second straight week after correcting slightly lower for four straight weeks.

According to the Treasury, the auction committee last Monday raised P5 billion each from 91-day T-bills, 182-day tenor and 364-day government securities.

For the 91-day T-bills, investors’ average yield slightly increased to 5.870 percent, versus the previous tender’s 5.772 percent. Bids for the 91-day T-bills inched up, ranging from 5.824 percent to 5.895 percent.

The 181-day T-bills saw its yield averaging at 5.973 percent compared to last auction’s 5.885 percent. The government security rates were between 5.900 percent and 5.990 percent. Investors’ average rate for the 364-day T-bills, meanwhile, was at 6.044 percent with a yield range of 6.025 percent to 6.064 percent. Tbills’ yields averaged 5.983 percent in the Treasury’s previous tender last April 8.

The auction was 2.7-times oversubscribed, attracting P39.8 billion in total tenders, the Treasury said.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the higher average auction yields are similar to the week-onweek slight increase in most comparable short-term PHP BVAL yields.

This, after more hawkish signals from some US Federal Reserve (Fed) and local monetary officials after the recent pick up in inflation, Ricafort added. “However, important positive offsetting factor would be the seasonal increase in tax revenue collections in April that could help reduce/ narrow the budget deficit and also reduce borrowings/debt,” the RCBC executive said.

Last week, the government borrowed a total of P35.6 billion from the combined auction of T-bills and T-bonds which saw mixed results due to higher average auction yields for both debt papers.

The national government aims to raise as much as P75 billion from the sale of T-bills this April. It is also targeting to raise P195 billion this month from the combined sale of Tbills and Treasury bonds (T-bonds).

The state also aims to borrow, following a 75:25 mix in favor of domestic sources, a total of P1.853 trillion from the domestic market through the sale of T-bills and T-bonds, based on state budget documents.