T-bill yields rise; P22B raised
Yields on short-dated debt paper went up for the second straight week during Monday’s sale of Treasury bills (T-bills), following the surprise rate pause of the Bangko Sentral ng Pilipinas (BSP) meant to insure the economy from upside risks to inflation.
But the higher borrowing cost did not stop the Marcos administration from raising its target amount of local debts.
Auction results showed the Bureau of the Treasury (BTr) sold P22 billion via T-bills yesterday, as planned.
The BTr said the offering attracted P56.3 billion in total tenders, exceeding the original size of the issuance by 2.6 times.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said T-bill rates still climbed after the slow easing cycle of the BSP was punctuated by a rate freeze last week, which defied market expectations.
Recall that Governor Eli Remolona Jr. had said that the “difficult” decision to pause was meant to protect the economy and the inflation outlook from the “unusual” kind of uncertainties emanating from global trade developments.
As such, the BTr said the 91-day T-bill fetched an average rate of 5.318 percent, higher than the 5.128 percent seen in the previous auction.
The yield on the 182-day debt note also went up to 5.662 percent from 5.562 percent.
Lastly, local creditors asked for an average rate of 5.780 percent for the 364-day T-bill, more expensive than the 5.726 percent recorded in the previous week.
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.
By sources of financing, the government will borrow P507.41 billion from foreign investors in 2025. The remaining P2.04 trillion is targeted to be raised domestically, of which P60 billion will be via T-bills and P1.98 trillion via longer-dated Treasury bonds.
