March 15, 2022
MANILA – Philippines—Ending four-straight fully rejected auctions, the Bureau of the Treasury (BTr) on Monday (March 14) raised P9.14 billion from short-dated T-bills despite still high bid rates from domestic creditors.
National Treasurer Rosalia de Leon partly attributed the partial award of the BTr’s P15-billion treasury bills offering to rates which “continue to move up in tandem with the surge in oil and commodities prices” believed to be among the impacts of the ongoing Russia-Ukraine war.
Also, the higher yields sought by government securities eligible dealers (GSEDs) priced-in the expected interest rate lift-off by the US Federal Reserve this week, De Leon added.
De Leon said the rates at which the IOUs were awarded had been benchmarked by the BTr against current market levels.
The BTr accepted P3.04 billion out of the P5-billion in the benchmark 91-day treasury bill offered, at an average rate of 1.305 percent — a jump from 0.899 percent when it last fully awarded T-bills last Feb. 21.
It also awarded P3 billion out of a similar P5-billion offering of 182-day debt paper, at an average of 1.458 percent, up from 1.157 percent three weeks ago.
On 364-day securities, the BTr accepted P3.1 billion out of the P5-billion offer. The annual yield climbed to 1.734 percent from 1.568 percent previously.
The auction was oversubscribed with a total of P23.35 billion in tenders across the three tenors.
Prior to Monday’s domestic fund-raising, the Treasury declined to borrow a total of P100 billion in T-bills and bonds across four auctions during the past two weeks, as creditors pitched high bids amid markets laden with risks and uncertainties wrought by the Ukraine-Russia conflict.
Department of Finance (DOF) and BTr officials had said that despite the lack of borrowings in the two weeks following Russia’s attack on Ukraine, the national treasury had sufficient cash buffer for the government’s budget requirements, mainly coming from the P457.8 billion raised from the latest retail treasury bond (RTB) issuance, plus extra revenues from excess value-added tax (VAT) and import duties collected from expensive oil.
The government borrows more locally through treasury bills and bonds to temper foreign exchange risks while taking advantage of flushing liquidity in the financial system. Out of the P2.2-trillion total borrowings programmed for 2022, three-fourths will be from the domestic debt market, the BTr had said.