Gov’t partially awards T-bills

The government made a partial award of the Treasury bills (T-bills) it offered on Monday amid reduced market appetite and liquidity following its retail Treasury bond (RTB) offering.

The Bureau of the Treasury (BTr) raised PHP 14.8 billion from its offering of T-bills on Monday, lower than the planned PHP 15 billion, even as total bids reached PHP 35.765 billion or more than twice the amount on the auction block.

Broken down, the Treasury raised PHP 5 billion as planned from the 91-day T-bills as tenders for the tenor reached PHP 8.115 billion. The three-month paper was quoted at an average rate of 5.71%, 11.8 basis points (bps) higher than the 5.592% seen for a partial award last week. Accepted rates ranged from 5.674% to 5.725%.

The BTr likewise borrowed the programmed PHP 5 billion via the 364-day debt papers as demand totaled PHP 15.24 billion. The average rate of the one-year T-bill inched up by 0.6 bp to 6.085% from the 6.079% quoted last week. Accepted yields were from 6.05% to 6.096%.

Meanwhile, the government raised just PHP 4.8 billion from the 182-day securities, below the PHP 5-billion program, despite bids for the tenor reaching PHP 12.41 billion. The average rate for the six-month T-bill was capped at 5.971%, down by 0.1 bp from the 5.972% fetched for a full award last week, with accepted rates at 5.925% to 5.999%.

At the secondary market on Monday before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.6226%, 5.9045%, and 6.1323%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.

“​The partial awarding at today’s T-bill auction reflected reduced appetite by the BTr amid pending issuance of the recently concluded RTB 30 offering last week,” a trader said in an e-mail on Monday.

The government raised a record PHP 584.86 billion from its offer of five-year retail bonds that ended on Friday, the BTr said in a statement over the weekend.

Of the total, PHP 212.72 billion was awarded at the rate-setting auction for the 30^th tranche of RTBs held on Feb. 13.

An additional PHP 372.14 billion was raised during the nine-day public offer period, with PHP 128.69 billion of this being new money and PHP 243.45 billion coming from the bond exchange component of the offering.

The BTr will issue the bonds on Feb. 28, Wednesday. The papers carry a coupon rate of 6.25%.

T-bill rates mostly rose due to easing expectations of an early rate cut by the US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

The T-bill auction on Tuesday was the last for the month. The BTr raised PHP 61.3 billion from the short-term securities in February, above the PHP 60-billion program, even after making partial awards in two auctions after the government upsized its planned issuance in one offering.

On Tuesday, the BTr will offer PHP 30 billion in fresh 20-year Treasury bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year or PHP 1.39 trillion. — A.M.C. Sy