T-bill rates mixed amid spike in US Treasury yields
Yields on short-dated local debts of the government were mixed during Monday’s sale of Treasury bills (T-bills), amid an upswing in US borrowing costs that was triggered by the decision of Moody’s to downgrade America’s sovereign credit rating.
But auction results showed the Bureau of the Treasury (BTr) still accepted the higher rates and raised P25 billion via T-bills, as planned.
The offering attracted total tenders amounting to P78.4 billion, exceeding the original size of the issuance by 3.1 times.
But despite the strong demand, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said rates were still mixed amid the recent increase in US Treasury yields.
The 91-day T-bill fetched an average rate of 5.515 percent, lower than the preceding week’s 5.546 percent.
The average yield for the 182-day debt paper likewise fell to 5.612 percent, from 5.650 percent before.
However, local creditors asked for an average yield of 5.702 percent for the 364-day T-bill, more expensive than the 5.655 percent seen last week.
“The latest 364-day Treasury bill average auction yield corrected slightly higher week-on-week after the latest Moody’s downgrade on the US credit rating by one notch to Aa1 led to higher US Treasury yields,’ Ricafort said.
“The 91-day and 182-day T-bill auction yields continued to slightly decline after an increase in demand,” he added.
For this year, the Marcos administration is targeting to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion, or equivalent to 5.3 percent of the country’s gross domestic product.
