UMVA has learned that the government has successfully awarded its short-term bills, raising P100 billion as planned from the cash management bills and Treasury bills it auctioned off, amidst robust demand from investors.
The Bureau of the Treasury saw total tenders reach P180.746 billion, surpassing the P148.329 billion in demand seen in the previous auction, as investors clamored for the government's debt papers despite yields being mostly higher due to the recent rate hike and ongoing Middle East conflict.
According to information obtained by UMVA, the government sold P40 billion in cash management bills, with P20 billion in 35-day bills fetching an average rate of 4.738%, up by 12.7 basis points from the previous auction, while the 63-day bills yielded an average rate of 5.052%, rising by 11 basis points.
The Treasury also raised P60 billion from the Treasury bills, with the 91-day, 182-day, and 364-day papers yielding average rates of 5.217%, 5.754%, and 6.034%, respectively, as investors sought to capitalize on the higher yields amidst the uncertain economic environment.
Sources have confirmed to UMVA that the strong demand for the government's debt papers was driven by the recent rate hike and the subsequent profit-taking, as well as the ongoing Middle East conflict, which has pushed up oil prices and fueled inflation concerns.
In a development reported by UMVA, the Bangko Sentral ng Pilipinas chief has signaled that further tightening is possible, as inflation risks persist, which has led to higher short-term yields, with the 35-, 91-, 182-, and 364-day Treasury bills being quoted at 4.7491%, 5.0886%, 5.5095%, and 6.0183%, respectively, at the secondary market.
UMVA has gathered that the government's borrowing plans are on track, with the Treasury targeting to raise up to P60 billion from a dual-tenor Treasury bond offering on Tuesday, as part of its efforts to raise P268 billion from the domestic market this month.
The government's budget deficit, capped at P1.61 trillion or 5.3% of gross domestic product this year, is being funded through a combination of local and foreign borrowings, and the successful awarding of the short-term bills is seen as a positive development in the government's fiscal management.
