Bellwether T-bill rate drops to 0.568%

MANILA, Philippines – The Bureau of the Treasury (BTr) sold P9.6 billion worth of 91, 182 and 364-day Treasury bills (T-bills) in an auction yesterday at a lower cost for the short-term debt.

At yesterday’s trading, the 91-day T-bill fetched an average rate of 0.568 percent from 0.680 percent previously or a decline of 11.2 basis points.

Total tenders reached P6.431 billion, significantly above the original offer of P1.5 billion.

National Treasurer Roberto Tan said the results of the auction were positive, noting that even the uptick in rates in the 182 and 364-day T-bills merely showed adjustments in the market.

“Generally, it’s a very positive auction turnout mainly because of the confluence of good news,” Tan told reporters after the auction.

He noted that investors were reacting positively to the narrower-than-expected budget deficit in the first quarter of the year.

Last week, the government reported a first quarter deficit of P26.197 billion or below the goal of P112 billion for the period.

“It’s pointing to a scenario where government management of the fiscal program remains very effective,” Tan said.

The high volume of bids allowed the BTr to sell P2.1 billion. The Treasury may increase the volume of bids it would accept if the volume of non-competitive bids is less than 25 percent of all tenders.

The 182-day debt paper fetched an average rate of 0.950 percent from 0.898 percent previously or a slight uptick of 5.2 basis points.

For this paper, total bids amounted to P6.654 billion or almost double the programmed sale of P3.5 billion.

Similarly, the average rate of 364-day debt paper amounted to 2.032 percent from 1.968 percent previously or higher by 6.4 basis points. For this paper, investors tendered a total of P8.740 billion, almost double the P4 billion offered by the government auction panel.

Yesterday’s debt sale formed part of the P117 billion borrowing program for the second quarter of the year.

Of the P117 billion, the government has programmed to sell P63 billion worth of Treasury bills from April to June and P54 billion worth of T-bonds.

The government issues T-bills and bonds to finance its budget deficit. This year, the government is eyeing to contain the budget deficit at P300 billion this year or 3.2 percent of total economic output.

Last year, the budget gap hit P314.4 billion or 3.7 percent of gross domestic product. –Iris C. Gonzales (The Philippine Star)