Yields on short-term gov’t debt end higher on hawkish BSP, Fed

THE GOVERNMENT fully awarded the short-term bills it offered on Monday with mostly higher average yields following hawkish signals from both the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve, and with the Middle East conflict still unresolved.

- Aaron Michael C. Sy

The Bureau of the Treasury (BTr) raised a combined P90 billion as planned from the cash management bills (CMBs) and Treasury bills (T-bills) it auctioned off as total tenders reached P178.888 billion. This was slightly lower than the P180.746 billion in demand seen for a P100-billion offer on June 23.

It said it made a full award as the strong demand for the offering “(reflects) strong investor confidence.”

For the cash management bills, the government awarded its target P30 billion as bids reached P56.28 billion.

Broken down, it sold P20 billion in 35-day CMBs as demand for the tenor was at P25.23 billion. The one-month paper fetched an average rate of 4.797%, rising by 5.9 basis points (bps) from the 4.738% quoted for the tenor last week. Accepted bid yields ranged from 4.7% to 4.972%.

The Treasury also raised P10 billion from the 63-day bills as tenders reached P31.05 billion. The two-month papers fetched an average rate of 5.081%, up by 2.9 bps from 5.052% in the previous auction. Accepted rates were between 5% and 5.125%.

For the T-bills, the BTr fully awarded its P60-billion offer, with total tenders at P122.608 billion.

Broken down, the Treasury borrowed P20 billion via the 91-day T-bills as demand for the tenor reached P36.79 billion. The three-month paper fetched an average rate of 5.245%, rising by 2.8 bps from 5.217% last week. Bids accepted had rates from 5.18% to 5.28%.