Connect with us

Hi, what are you looking for?

Economy

Gov’t hikes award of Treasury bills as rates drop

THE BUREAU of the Treasury upsized its award of short-term securities at its first auction for the year. — BW FILE PHOTO

THE GOVERNMENT on Monday hiked its award of Treasury bills (T-bills) and even opened its tap facility as yields went down across the board on expectations of slower inflation data.

The Bureau of the Treasury (BTr) borrowed P24 billion via T-bills on Monday, higher than its P20-billion program as it accepted more bids from non-competitive investors for the three-month and six-month tenors.

The offering was over four times oversubscribed, with tenders reaching P83.638 billion.

The Treasury also opened its tap facility to offer another P10 billion in one-year securities.

Broken down, the BTr raised P7 billion via the 91-day debt papers, exceeding the P5-billion program as bids reached P19.413 billion. The average rate of the three-month T-bills stood at 0.987%, down by 3.5 basis points (bps) from the 1.022% fetched in the Dec. 14 auction.

The Treasury also accepted P7 billion in 182-day papers, more than the P5-billion plan, as tenders amounted to P21.17 billion. The six-month tenor saw its average rate go down by 3.1 bps to 1.369% from 1.4% previously.

For the 364-day securities, the government raised P10 billion as planned out of bids worth P43.055 billion. The one-year T-bills were quoted at 1.614%, down 7.2 bps from the previous average rate of 1.686%.

National Treasurer Rosalia V. de Leon said the government’s first regular auction of 2021 was met with “strong” reception from investors on expectations that inflation eased last month.

“Rates declined ahead of tomorrow’s (Jan. 5) December CPI (consumer price index) report [amid] expected easing of inflation last month,” Ms. De Leon told reporters via Viber after the auction.

She added that the auction results also reflected a liquid market, with P21 billion worth of T-bills maturing this week.

The Philippine Statistics Authority will report December and full-year 2020 inflation data on Tuesday, Jan. 5.

Headline inflation likely rose by 2.9-3.7% last month on higher prices of oil and agricultural products, the central bank said last week.

Inflation picked up by 3.3% in November, taking the year-to-date print to 2.5%, within the Bangko Sentral ng Pilipinas’ full-year target of 2-4%.

Meanwhile, a trader said yesterday’s auction results showed investors’ preference for shorter tenors amid continued uncertainties due to the coronavirus disease 2019 (COVID-19) pandemic.

“The T-bill offering started the year with a bang as reflected in the total tenders submitted. Pent-up demand was also observed after two weeks or so without primary offerings of short-term papers,” Kevin S. Palma, peso sovereign debt trader at Robinsons Bank Corp., said in a Viber message.

“For as long as the threat of COVID-19 to our economy is still apparent, demand for T-bills will linger as investors would prefer to park their funds on the short end of the curve to see how developments will play out,” Mr. Palma added.

The Treasury will offer P30 billion in reissued 10-year Treasury bonds (T-bonds) today. The papers have a remaining life of four years and eight months and bear a coupon of 3.625%.

The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of T-bills and P60 billion from fortnightly T-bond offerings.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — B.M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

By Jenina P. Ibañez, Senior Reporter PHILIPPINE MANUFACTURING activity rose to an eight-month high in November, as new orders increased for the first time...

Economy

THE NATIONAL Government’s outstanding debt swelled to P11.97 trillion as of the end of October as it offered more domestic securities, preliminary data from...

Economy

MOTORISTS experience heavy traffic along Commonwealth in Quezon City on Wednesday. — PHILIPPINE STAR/ MICHAEL VARCAS BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E....

Economy

THE SENATE on Wednesday approved on third and final reading the proposed P5.024-trillion national budget for 2022. Senators unanimously passed the 2022 General Appropriations...

Economy

EVERYTHING’s coming full circle from the boy from Cebu who wanted to write but ended up cooking. Myke “Tatung” Sarthou, celebrity chef, started out...

Economy

1 of 6 THE VIRTUS awards by the Hotel Sales and Marketing Association (HSMA) Philippines continues to honor professionals and institutions in hospitality: a...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.