BTr fully awards T-bill offer on strong demand

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THE GOVERNMENT fully awarded the Treasury bills (T-bills) it offered on Monday despite slightly higher rates on some tenors as demand remained strong amid easing inflation concerns.

The Bureau of the Treasury (BTr) raised P25 billion as planned via the T-bills on Monday as the offering was nearly thrice oversubscribed, with bids at P71.65 billion. Demand for the securities increased from the P54.74 billion in tenders seen at last week’s auction.

The BTr also opened its tap facility yesterday to offer another P5 billion in one-year instruments.

Broken down, the Treasury raised P5 billion as planned via the 91-day papers from P14.85 billion in bids. The three-month papers fetched an average rate of 1.349%, up by 2.4 basis points (bps) from the 1.325% seen last week.

It also awarded P8 billion in 182-day T-bills as programmed as the tenor attracted P21.6 billion in demand. The average yield of the six-month papers inched up to 1.713% from 1.695% previously.

Lastly, the BTr made a full P12-billion award of the 364-day securities it offered on Monday from P35.2 billion in bids. The one-year papers were quoted at an average rate of 1.884%, down by 1.9 bps from the 1.903% seen last week.

National Treasurer Rosalia V. de Leon said the rates of the 91- and 182-day T-bills inched up as demand continued to swamp the short end of the curve.

Meanwhile, a bond trader said the market is “starting to get comfortable again with the one-year paper,” with the decline in its average rate slowly tapering off in recent auctions as a dimmer economic outlook “overcoming inflation concerns.”

Economic managers are currently reviewing their 6.5-7.5% growth target for the year, with the reimposition of strict lockdown measures in the capital and adjacent provinces expected to dent the full-year print by 0.8 percentage point.

Meanwhile, headline inflation slowed to 4.5% in March from the 4.7% in February, driven by a slower increase in food prices.

Inflation averaged at 4.5% for the first quarter, beyond the BSP’s 2-4% target for 2021.

The Bangko Sentral ng Pilipinas (BSP) expects inflation to average 4.2% this year before easing to 2.8% in 2022. Central bank officials have said the inflation path is likely to ease below the midpoint of the 2-4% target towards the fourth quarter.

BSP Governor Benjamin E. Diokno has said the central bank will remain accommodative to support economic recovery but will continue to watch out for potential second-round inflation effects, such as wage and transport fee hikes.

The Philippine Statistics Authority will report inflation data for April on May 5, while the first-quarter gross domestic product (GDP) report will be out on May 10.

The Treasury wants to raise P170 billion from the local debt market this month: P100 billion via weekly offers of T-bills and P70 billion from fortnightly auctions of Treasury bonds (T-bonds).

On Tuesday, the BTr will offer P35 billion in fresh seven-year T-bonds.

The government is looking to borrow P3 trillion this year from domestic and external sources to help fund a budget deficit seen to hit 8.9% of GDP. — B.M. Laforga