BTr borrows as planned despite higher T-bill rates

By Ian Nicolas P. Cigaral

@ipcigaral

The government still managed to raise its target amount of P15 billion in short-term debt during Monday’s sale of Treasury bills (T-bills) despite the higher rates demanded by creditors.

Auction results from the Bureau of Treasury (BTr) showed the T-bills attracted total bids amounting to P43.2 billion, 2.9 times bigger than the original size of the offer.

However, the demand was lower compared to the P46.88 billion total orders booked during the previous week’s auction.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the lower demand and the turmoil at the Red Sea prompted lenders to ask for higher rates.

“Global crude oil prices among one-month highs after increased tensions at the Red Sea area recently, after the United States and United Kingdom started air strikes on Houthi rebel targets in Yemen,” Ricafort said.

Rates for the 91-day paper averaged 5.226 percent, more expensive than the 5.102 percent seen in the last auction.

Borrowings

Meanwhile, the 182-day tenor fetched an average yield of 5.685 percent, higher than the previous week’s 5.582 percent.

Rates charged for the 364-day T-bill averaged 5.999 percent, costlier than last week’s 5.973 percent.

Documents from the budget department showed the Marcos administration planned to borrow P1.85 trillion onshore in 2024.

Of that amount, P51 billion will be raised via T-bills while P1.8 trillion will come from weekly auctions of Treasury bonds.

Those borrowings are needed to help plug a projected budget hole of P1.39 trillion this year, which is equivalent to 5.1 percent of gross domestic product.

Based on latest government forecasts, it is only in 2027 that the budget deficit, as a share of the economy, is expected to return to the prepandemic level at 3.2 percent. INQ