THE Bureau of the Treasury failed to raise the full P55 billion it offered on Tuesday amid high investors’ asking yields for Treasury bills (T-bills), with the 35-day touching 5 percent, after the Bangko Sentral ng Pilipinas (BSP) raised the key policy rates.
Results were mixed during the T-bills auction, as the Treasury partially awarded bids for the 35-day cash management bill (CMB) and 91-day T-bill, while fully awarding bids for the 182-day and 364-day T-bills.
Total demand for all tenors reached P75.954 billion, or 1.3 times the P55 billion offering.
The average yield on the 35-day CMB rose to 5.036 percent, 21.3 basis points higher than the previous week’s 4.823 percent. Yields ranged from 4.9 percent to 5.050 percent. Of the P10.852 billion in bids tendered for the security, only P8.252 billion was accepted by the Treasury as borrowing costs for the ultra-short tenor reached the 5 percent level.
As for the T-bills, the 91-day yield averaged at 5.138 percent, up by 8.7 basis points from 5.051 percent last week. Awarded yields ranged from a low of 5.040 percent to a high of 5.2 percent.
The Treasury awarded P16.330 billion out of the P21.803 billion tendered for the debt papers.
Meanwhile, the 182-day average yield grew by 8.4 basis points to 5.517 percent from 5.433 percent. Yields were as low as 5.450 percent to as high as 5.585 percent. The Treasury raised the full P15 billion it intended to borrow as tenders amounted to P27.749 billion.
Lastly, average yield on the 364-day notes went up by 7.7 basis points to 5.717 percent from 5.640 percent. Yields ranged from 5.650 percent to 5.750 percent. The Treasury fully awarded its P10-billion offering from P15.550 billion in bids received.
T-bills edged higher for a second consecutive week after the BSP hiked interest rates and investors continued to factor in further monetary tightening to contain inflation, said Rizal Commercial Banking Corp. Chief Economist Michael Ricafort.
BSP Governor Eli M. Remolona Jr. has said that oil prices remain volatile, and the impact of a severe El Niño event and potential minimum wage adjustments pose further risks to inflation.
‘We will tighten as much as we need to, to bring the inflation rate down to its target,’ Remolona said.
Ricafort said the peso’s recent depreciation to above P62 against the US dollar could also raise import costs and add to inflationary pressures.
‘Sticky’ inflationary pressures could prompt the BSP to maintain a tighter monetary policy stance, while higher rates could also stabilize the peso and contain the inflationary impact of more expensive imports, Ricafort said.
This Wednesday, the Treasury will auction 5-year Treasury bonds to raise P30 billion.
For 2026, the government will borrow P2.733 trillion and will follow a 70:30 financing mix, in favor of domestic sources.
As of the first half of the year, gross borrowings rose by 14.45 percent to P1.821 trillion from P1.591 trillion in the same period a year ago.