Benchmark Treasury bills up slightly

MANILA, Philippines – The Bureau of the Treasury (BTr) successfully sold P8 billion worth of Treasury bills (T-blls) in an auction yesterday even as the average rates for the 91- and 182-day debt papers moved up slightly.

The average rate of the 91-day T-bill rose to 3.985 percent from 3.956 percent previously or an increase of 2.9 basis points. For this tenor, investors tendered a total of P3.720 billion, more than double the P1.5 billion offered by the government.

Similarly, the average rate of the 182-day debt paper rose to 4.253 percent, or 6.5 basis points above the previous average of 4.188 percent. Bids ranged from 4.199 percent to 4.3 percent. Investors tendered a total of P3.824 billion, also more than the offer of P3.5 billion.

On the other hand, the one-year paper fetched an average rate of 4.500 percent, lower than the previous rate of 4.590. For this paper, investors submitted a total bid of P8.715 billion, more than double the government’s offer of P3.5 billion.

National Treasurer Roberto Tan attributed yesterday’s auction results to investors’ preference for long-term papers over short-term securities such as the 91 and 182-day T-bill.

“The longer term view is positive. There are some adjustments for the 91-day and 182-day paper but we accepted this because the uptick is not significant,” Tan told reporters after the auction.

He attributed short-term jitters on the latest budget deficit figure.

“The short-term view is that they’re looking at how we’re going to build that up,” Tan told reporters yesterday.

Last week, the government reported that the budget deficit hit P196.7 billion in the first six months of the year, 28.2 percent more than the P153.4-billion budget deficit recorded in the same period last year.

The six-month figure is P51.6 billion higher than the programmed ceiling of P145.2 billion for the period due mainly to higher-than-programmed spending, according to the Bureau of the Treasury.

The Aquino administration attributed the wider-than-expected deficit to overspending by the Arroyo administration setbacks encountered by the government in the privatization of state-owned assets. The Arroyo administration had planned to raise P30 billion from the sale of government-owned assets in the first half of the year but this did not happen because of poor market conditions and administrative concerns.

In June alone the budget deficit hit P34.6 billion, or 14.5 percent more than the P30.2 billion deficit recorded in the same month last year. –Iris C. Gonzales (The Philippine Star)