Benchmark rates move up

ON the heels of an increase in its financing requirement this year, the Aquino administration on Monday failed to raise the full amount it had planned to borrow through the sale of Treasury bills. At an auction, the government raised P6.450 billion, or lower than the scheduled issuance of P8 billion. It expects P6.5 billion worth of debt papers to mature this week.

The rate on the 91-day T-bill, which banks use in pricing their loans, inched up to 3.956 percent from the 3.927 percent when the three-month debt papers were last offered on June 28.

Done deals at the secondary market fetched 3.950 percent. Total tenders reached P3.540 billion but the auction committee accepted only P1.350 billion worth of bids.

The rate on the 182-day papers hit 4.188 percent, or 3.2 basis points higher than the previous 4.156 percent average.

Tenders for the six-month IOUs reached P4.050 billion, but the auction committee awarded only P1.6 billion of the P3-billion worth of papers on offer.

At the secondary market, the 182-day T-bills fetched 4.2 percent.

The 364-day T-bill garnered tenders worth P6.7 billion, but the government stuck to its P3.5 billion offering.

The rate on the one-year paper inched down to 4.590 percent, or 2.9 basis points lower than in the previous auction.

“Investors really show more interest on long-dated debt papers as opposed to shorter ones such as the 91-day and the six-month IOUs. They want long-dated IOUs as it provides them more stability and sustainability as against the short-dated securities,” National Treasurer Roberto Tan said after the auction.

He said that investors were neither affected positively nor negatively by the Aquino government’s announcement last week that it would raise its budget deficit ceiling for the year to P325 billion from the previous cap of P293 billion.

“The upward adjustment of the deficit ceiling is very minimal. Hence, it neither affected the market in a positive or negative way,” he said.

Global peso bonds

Tan said the government wants to lure in high net-worth foreign institutions for its planned global peso bonds, adding that the debt papers would be sold for a minimum amount of P1 million.

“If the Philippine currency stabilizes, one [investor] gets more in dollar terms. That is the economics of the peso from the international investors,” he said.

“That is another story [when the peso depreciates] but the indicators show that peso is growing stronger,” he said.

The Treasury chief said the government has a lot of debt options, adding that, “We have many windows to determine which could be the best” way to finance the deficit.

But “the deficit is just a small amount [and] the Bureau of the Treasury has a lot of cash,” he said. –Katrina Mennen A. Valdez reporter, Manila Times