T-bill rates eased further
The Philippine government was able to raise its target amount of short-dated local debt during Monday’s sale of Treasury bills (T-bills).
Yields fell for the third week driven by building euphoria over the Philippines’ potential inclusion to JP Morgan’s key bond index.
Auction results showed the Bureau of the Treasury borrowed P22 billion via T-bills, as planned.
The offering attracted P80.5 billion in total demand, exceeding the original size of the issuance by 3.7 times.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said yields continued to ease as the Philippines nears inclusion to JP Morgan’s emerging market bond index.
Ricafort said the improved market sentiment in the Philippines “could help attract more foreign investments, increasing liquidity, and lowering borrowing costs in the country.”
The Treasury said the 89-day T-bill fetched an average rate of 4.828 percent, lower than the previous week’s 4.883 percent.
The yield for the 182-day debt paper, meanwhile, averaged 5.075 percent. This was lower than the preceding offering’s 5.081 percent.
Lastly, investors sought an average yield of 5.171 percent for the 364-day T-bill, down from 5.195 percent before.
This year, the government plans to borrow P2.6 trillion from lenders to plug a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of gross domestic product. The drive is expected to push the debt stock to P17.36 trillion by year’s end.
Fiscal planners say they will continue to favor onshore borrowing to limit exposure to foreign exchange risks. The Marcos administration has also made clear it is seeking an upgrade to an A-level credit rating.
