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Government sells P2 billion more T-bills on low rates across tenors Date: November 03, 2020
By Bernadette D. Nicolas | November 3, 2020

The Bureau of the Treasury awarded on Tuesday P22-billion in Treasury Bills (T-bills), an upsize from its initial P20-billion offering.

Rates across all tenors were all lower than the previous auction and secondary-market benchmark rates.

The auction was oversubscribed by more than 4.8-times with total bids reaching P96.7 billion, prompting the auction committee to double the accepted non-competitive bids for the 182-day tenor to P4 billion.

National Treasurer Rosalia V. De Leon said they were satisfied with the auction results.

“[We] got what we wanted: more than P20 billion at lower rates,” De Leon said.

Sought what pushed the rates lower, she pointed to the inflation outlook, which remains benign; still within [the] 2-percent to 4-percent band, [the] sustained ample liquidity and bias for shorties.” T-bills are peso-denominated short-term, or “shorties,” fixed-income securities issued by the Republic of the Philippines through the Bureau of the Treasury.

De Leon added the Treasury also opened the tap facility for an additional P5 billion for 364-day T-bills.

The 91-day T-bills fetched an average rate of 1.058 percent, 2.1 basis-points lower than the previous auction rate at 1.079 percent.

Tenders for the security amounted to P24.987 billion, almost five times the P5-billion offer.

Meanwhile, the average rate for the 182-day T-bills settled at 1.499 percent, falling by 4.4 basis points from 1.543 percent.

Bids for the tenor reached P31.12 billion, more than six times the initial P5-billion offering.

The 364-day T-bills also posted a lower average rate at 1.759 percent, sliding by 3.2 basis points from 1.791 percent previously.

The amount tendered for the security was recorded at P40.62 billion, four times the P10-billion offer.

For this month, the Treasury is set to borrow P140 billion from the local debt market, the same amount it programmed to borrow in October.

The government has more than doubled its borrowing program this year to an all-time-high nominal P3 trillion from P1.4 trillion originally to cover the expected doubling of budget deficit as well as to fund its spending requirements for its Covid-19 response.

As of end-September, gross borrowings of the national government have already reached P2.56 trillion, equivalent to more than 85 percent of this year’s program.

As tax collections are down amid the pandemic, the Development Budget Coordination Committee is projecting the country’s budget deficit to more than double to 9.6 percent of gross domestic product (GDP) or P1.815 trillion this year from only 3.4 percent of GDP or P660.2 billion last year.


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