The Philippine government successfully auctioned off Treasury bills (T-bills) on Monday, raising P50 billion as planned from the T-bills it offered to investors.
Total tenders for the auction reached P126.091 billion, more than twice the amount on offer. Despite this high demand, the government was able to make a full award on all tenors, with average yields broadly aligned with prevailing secondary market rates.
Breaking down the auction results, the Treasury borrowed P20 billion as planned via the 91-day T-bills, with demand reaching P56.385 billion. The three-month paper fetched an average rate of 5.097%, a decline of 4.6 basis points from 5.143% last week.
The 182-day debt also saw a full award, with the government raising P20 billion from tenders that hit P47.376 billion. The average yield on the six-month T-bill was at 5.707%, down by 2.2 basis points from 5.729% previously.
Lastly, the Treasury sold its target P10 billion in 364-day securities, with bids for the tenor totaling P22.33 billion. The one-year paper fetched an average rate of 5.972%, inching up by 0.8 basis points from 5.964% last week.
Analysts point to the mixed yields as a reflection of the government's cautious stance, despite softer-than-expected June inflation data. The Bangko Sentral ng Pilipinas (BSP) maintained its cautious stance, while average yields were mostly lower due to the recent downward correction in global crude oil prices.
The government's efforts to curb inflation come as headline inflation slowed to 6.4% in June, but remained within the BSP's 2%-4% tolerance band for the fourth consecutive month. Core inflation, however, quickened for a sixth consecutive month to 4.4% in June, indicating broadening price pressures and second-round effects.
The government plans to raise P410 billion from the domestic market this month, with P250 billion via T-bills and P160 billion through T-bonds. The Treasury borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.659 trillion or 5.4% of gross domestic product this year.
