T-bill rates dip

The government was able to borrow its targeted amount of short-term debt during Monday’s sale of Treasury bills (T-bills). This after rates mostly declined week-on-week as creditors breathed a sigh of relief over easing tensions in the Middle East.

Auction results showed the Bureau of the Treasury (BTr) raised P15 billion, as planned, via T-bills.

The offer was met with high demand. Total orders booked for the debt paper amounted to P51.20 billion, over three times larger than the original size of the issuance.

The higher appetite from local lenders, in turn, helped bring down rates for most of the tenors, snapping three straight weeks of rising rates.  Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said yields declined as markets welcomed the recent developments in the Middle East.

“Treasury bill average auction yields mostly corrected slightly lower after Middle East tensions somewhat subsided for now between Israel and Iran, with no new retaliation for more than a week already (good signal for the markets),” Ricafort said in a commentary.

Average yields

According to the BTr, the three-month T-bill fetched an average yield of 5.869 percent, cheaper than 5.888 percent recorded last week. The rate for the six-month debt securities, meanwhile, fell to 5.988 percent, from 6.002 previously.

On the other hand, creditors asked for an average yield of 6.081 percent for the one-year T-bill, more expensive than the 6.080 percent in the last auction.

To note, the T-bill tenors sometimes change from the usual 91-, 182-, and 364-days when the settlement date or maturity date of the debt paper fall on a holiday.

The Marcos administration plans to borrow P585 billion from local creditors in the second quarter of 2024—the same as the financing program in the first quarter—to bridge its budget deficit.

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Under the plan, the government is targeting to raise P195 billion via T-bills and P390 billion via Treasury bonds (T-bonds).

The BTr lined up five T-bills auctions in April in hopes of borrowing P75 billion via short-dated debt paper. In May and June, the state plans to raise P60 billion each via T-bills.

Meanwhile, the government will open the second quarter with four T-bond offerings in April in a bid to sell P120 billion worth of long-dated debt securities. In May, the BTr is targeting to raise a bigger P150 billion via T-bonds.

The Marcos administration will cap the second quarter with four more T-bond issuances slated in June to raise P120 billion. INQ