Government securities auctioned this week may conclude with mixed results as market volatility spiked amid renewed tensions between the United States and Iran.
On Monday, the Treasury offered up to 90 billion pesos in short‑term instruments, including 30 billion pesos in cash management bills, 20 billion pesos in 35‑day bills, and 10 billion pesos in 63‑day bills. It also auctioned up to 60 billion pesos in Treasury bills, with 20 billion pesos each for 91‑ and 181‑day maturities and 10‑20 billion pesos for 364‑day debt.
Tuesday’s auction focused on reissued seven‑year Treasury bonds, with a target of 30 billion pesos and a remaining life of three years and three months.
Short‑term Treasury bill rates are expected to rise, mirroring movements in secondary market benchmarks and reflecting expectations of further monetary tightening domestically and abroad.
The recent easing of global oil prices following the reopening of the Strait of Hormuz also contributed to a shift in market sentiment.
Analysts project that the reissued seven‑year bonds will attract yields close to current secondary market levels, with traders estimating rates between 6.475 % and 6.525 %.
During the week, one‑month Treasury bill yields increased 17.38 basis points to 4.9229 %, 91‑day yields rose 10.34 basis points to 5.192 %, and 182‑day yields climbed 6.47 basis points to 5.5742 %. The 364‑day paper yielded 5.9761 %, down 4.22 basis points from the prior week.
The seven‑year bond yielded 6.8389 %, up 1.6 basis points, while the three‑year paper reached 6.4894 %, up 2.61 basis points.
Last week’s auction raised 100 billion pesos from cash management bills and Treasury bills, with total tenders amounting to 180.746 billion pesos.
Cash management bills met the 40 billion peso target, receiving bids of 57.49 billion pesos. The 35‑day bills sold 20 billion pesos at an average rate of 4.738 %, and the 63‑day bills sold 20 billion pesos at 5.052 %.
Treasury bills were fully awarded at 60 billion pesos. The 91‑day bills averaged 5.217 %, the 182‑day bills averaged 5.754 %, and the 364‑day bills averaged 6.034 %.
The earlier reissued seven‑year bond auction on June 9 raised only 27.617 billion pesos, below the 30 billion peso target, at an average yield of 7.307 %.
For July, the Treasury plans to raise 410 billion pesos from the domestic market, allocating 250 billion pesos to Treasury bills and 160 billion pesos to Treasury bonds.
These borrowing efforts support a budget deficit capped at 1.61 trillion pesos, representing 5.3 % of gross domestic product for the year.
