T-bill rates mostly up on bond sale squeeze
The Marcos administration was forced to accept mostly higher yields sought by local creditors during Monday’s sale of short-dated Treasury bills (T-bills), as the state’s massive Treasury bond (T-bond) offering tightened local liquidity conditions.
Auction results showed the Bureau of the Treasury (BTr) was able to borrow P25 billion via T-bills, as planned.
The offering was met with strong demand after attracting total tenders amounting to P73.9 billion, three times larger than the original size of the issuance.
But that was not enough to lower borrowing costs for the government.
The BTr said the 91-day T-bill fetched an average rate of 5.546 percent, more expensive than the 5.422 percent seen last week.
The average yield for the 182-day debt paper likewise rose to 5.675 percent, from 5.657 percent previously.
But creditors asked for an average rate of 5.691 percent for the 364-day T-bill, cheaper than the 5.722 percent seen in the previous auction.
In a market commentary, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the ongoing sale of 10-year T-bonds would mop up excess money supply in the financial system, which could have a tightening effect on liquidity conditions.
Recall that the BTr launched its new 10-year benchmark fixed-rate treasury note last week, allowing the government to raise P135 billion. The debt note was made available to investors through an extended offer period format, a first for a non-retail bond offering.
The 10-year T-bonds would be available until April 24, unless terminated earlier by the Treasury.
