T-bill rates end mixed
The government raised its full target amount of short-dated local debt at Monday’s Treasury bill (T-bill) auction, with yields ending mixed as investors continued to digest the Bangko Sentral ng Pilipinas’ (BSP) recent policy rate cut.
Auction results showed the Bureau of the Treasury (BTr) borrowed P20 billion via T-bills, as planned.
The offering attracted P87.5 billion in total bids, oversubscribing the original offer by 4.4 times.
According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp., the modest decline in rates followed the widely expected 0.25 percentage point BSP rate cut, which lowered the overnight borrowing rate to 4.5 percent.
“[The] important market catalyst was the unexpected hawkish signals from the BSP during the -0.25 rate cut announcement on Dec. 11, but offset by more dovish signals a day after on the possibility of one more BSP rate cut if economic recovery takes longer than expected,” Ricafort said.
After the central bank’s final monetary board meeting of the year, it signaled that another rate cut could be possible next year, echoed by analysts who said the cut would provide additional support to a weakening economy amid the corruption scandal.
The 91-day T-bill fetched an average rate of 4.731 percent, down from 4.759 percent last week.
The 182-day T-bill yielded 4.903 percent, slightly higher than 4.873 percent in the previous auction.
Creditors received an average yield of 4.924 percent for the 364-day debt note, lower than last week’s 4.962 percent.
This year, the government plans to borrow P2.6 trillion from lenders to cover a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of GDP. The funding drive is expected to push the debt stock to P17.36 trillion by year-end.
