BTr nearly meets programmed T-bill offering

THE Bureau of the Treasury raised P14 billion out of its P15-billion programmed offering of Treasury bills (T-bills) as investors stuck to their positions resulting to uptick in rates across all tenors.

The auction committee fully awarded P5 billion each for the 91-day and the 182-day T-bills while it partially awarded P4 billion out of the P5 billion offering for the 364-day T-bills.

National Treasurer Rosalia V. De Leon said investors are still factoring in possible rate hikes from both the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.

“Rates moved north with higher inflation particularly in US becoming persistent necessitating more aggressive rate hike. Locally, BSP has signalled to move this coming MB [Monetary Board] policy meet with 25bps [basis points] hike,” De Leon told reporters.

The BSP is set to hold its next policy meeting on June 23.

The auction, however, was almost twice oversubscribed as total bids reached P29.7 billion.

The awarded 364-day T-bills capped at an average rate of 2.325 percent, posting an uptick of 21.8 basis points from the Bloomberg Valuation (BVAL) Service Reference Rate of 2.107 percent.

Had the Treasury decided to fully award the 364-day debt papers, the security would have been capped at a much higher rate of 2.454 percent, or 34.7 basis points above the comparable BVAL rate.

Meanwhile, rates for the 91-day T-bills have averaged 1.572 percent, up by 8.6 basis points from the BVAL rate for the tenor at 1.486 percent.

Likewise, rates for the 182-day T-bills have also reached an average of 1.934 percent, higher by 5.5 basis points compared with the BVAL rate of 1.879 percent.

The Treasury is set to borrow this month about P250 billion from the domestic debt market, of which P175 billion is expected to come from auctioning off Treasury Bonds and another P75 billion through it sale of T-bills. 

Since the start of this month, the Treasury has raised P72.4 billion out of its P115 billion offering.

As of end-April, the national government’s outstanding debt hit another record-high at P12.76 trillion, just two months before President Duterte steps down from office.

The national government’s debt-to-GDP ratio as of the first quarter of the year rose to a 17-year-high at 63.5 percent, above the internationally recommended 60-percent threshold by multilateral lenders for emerging markets like the Philippines. It is also the highest since the country’s debt-to-GDP ratio hit 65.7 percent in 2005 under the Arroyo administration.

Image credits: Walter Eric Sy |