February 22, 2016 at 11:20 pm
Gabrielle H. Binaday
The government on Monday raised P20 billion from the local debt market, as Treasury bill rates fell across the board amid strong demand from investors.
The Treasury said it awarded P20 billion worth of short-term debt papers to investors on Monday, following the successful global bond sale last week.
It raised P8 billion from the sale of 91-day Treasury bills, P6 billion from 182-day papers and P6 billion from 364-day instruments.
“The auction committee decided for a full award of the Treasury bills offered during today’s auction, citing healthy market appetite and rates aligning below secondary market benchmarks,” the Treasury said in a statement after the auction.
The first treasury bill auction for the year was more than twice oversubscribed, attracting total tenders of P51.98 billion for the P20-billion debt instruments up for sale.
Interest rate on the P91- day or three-month debt facilities fell 17.1 basis points to 1.513 percent Monday from the previous rate of 1.684 percent, as tenders reached P26 billion or more than three times the original offer of P8 billion.
Interest rate on the 182-day or six-month debt papers averaged 1.508 percent, or 13.4 basis points lower than the previous rate of 1.642 percent. Tenders for the six-month Treasury bills reached P16.35 billion, or more than double of the original offer of P6 billion.
Data showed the 364-day or one-year instruments also saw the average rate drop 6.2 basis points to 1.678 percent from the previous auction average rate of 1.74 percent.
Tenders for the debt facilities amounted to P9.66 billion, exceeding the P6-billion offer by P3.66 billion.
“Auction results reveal strong preference for the short-dated securities,” the Treasury said.
The 91-day treasury bills will mature on May 25, while 182-day debt papers will mature on Aug. 24. The 364-day papers will mature on Feb. 22 next year.
The Treasury earlier said it planned to sell P135 worth of debt papers in the first quarter of 2016, including P60 billion worth of short-term debt papers while the rest would be bonds, or those with more than a year of maturity.
The government set the borrowing mix for 2016 at 85 percent from domestic market and 15 percent from the foreign market.
The government sold last week $2 billion worth of 25-year global bonds that fetched a record low interest rate.
The 25-year dollar bonds were sold to yield 3.7 percent, lower than the 3.95 percent coupon obtained by the debt instruments in 2015.
The coupon rate was also lower that the initial price guidance of 4 percent and was the lowest coupon ever issued by the Philippine government on a global bond since the 3.95-percent yield in 2015.