Government grants full treasury bills

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The government allotted all of the treasury bills it auctioned on Monday on stable demand, as investors continued to prefer to park their funds in short-term papers due to inflation fears.

The Bureau of the Treasury (BTr) raised 15 billion pesos as planned via the treasury bills it auctioned on Monday as total bids reached 34,721 billion pesos, almost double the initial offer but lower than the 36.088 billion pesos of bids recorded in the previous auction.

Broken down, the BTr raised 5 billion pesos as planned via 91-day debt securities from 9.3 billion pesos in tenders. Three-month Treasuries hit an average rate of 1.119%, up 0.6 basis points (bps) from the 1.113% seen in last week’s offer.

The BTr also borrowed 5 billion pesos as scheduled on the 182-day securities it offered on Monday as offers reached 14.201 billion pesos. The average six-month Treasury bill rate slipped 0.3 bps to 1.387% from 1.39% a week ago.

Finally, the government allocated the 364-day treasury bills to the tune of 5 billion pesos, the tenor having attracted tenders worth 11.22 billion pesos. The average yield on one-year instruments was 1.606%, up 0.2bp from the 1.604% recovered last week.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that rates had moved sideways due to good demand for short-term papers due to their limited supply.

The BTr only offers 15 billion pesos in treasury bills each week.

Meanwhile, a bond trader in a Viber post noted that Monday’s auction outcome was “nothing new” as the rates achieved reflect the bids being customer-driven.

“We expect it to stay the same in the future,” the trader said.

A second trader said Treasury bond yields moved sideways from the previous auction “supporting the upward trend in the GS (government securities) yield curve due to rising inflation expectations “.

“Global oil prices have continued to soar at their highest levels, while at the national level, we continue to see nine consecutive weeks of rising oil prices,” added the second operator.

Global oil prices soared on Monday amid tight supply and high demand for fuel in the United States and other economies rebounding from the effects of the pandemic, with U.S. crude reaching a seven-year high, reported Reuters Monday.

Brent crude rose 0.83% to $ 86.24 a barrel, while U.S. crude rose 0.80% to $ 84.51.

In the secondary market, 91-182 and 364 day T-Bills were quoted at 1.2296%, 1.4582% and 1.6104%, respectively, prior to auction, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System website. .

On Tuesday, the BTr will offer 35 billion pesos of reissued seven-year Treasury bonds (Treasury bonds) with a remaining term of six years and nine months.

The treasury office seeks to raise 200 billion pesos from the local market this month: 60 billion pesos from weekly treasury bill offers and 140 billion pesos from weekly treasury bond auctions .

The government wants to borrow 3 trillion PPPs from local and external sources this year to help finance a budget deficit that is expected to reach 9.3% of gross domestic product. – Jenina P. Ibañez with Reuters

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