The Bureau of the Treasury (BTr) is scheduled to auction next week P45 billion worth of treasury bills and bonds to help fund the government’s spending program for this year.
Yields on government securities have been on the rise with inflation still accelerating and government finances falling back into a deficit in February after posting a surplus in January. The central bank has also kept interest rates at a pause, waiting for clearer signals on whether price pressures would eventually recede as initially projected.
On Monday, the BTr will auction P15 billion worth of treasury bills—P5 billion each for the 91-day, 182-day and 364-day maturities. Average rates for the one-year paper had been allowed by the BTr to rise above 6 percent, while those for the three and six months are nearing that rate.
Yield on the 91-day paper settled at 5.870 percent after Monday’s auction while that on the 182-day paper rose to 5.973 percent. The 364-day paper was allowed a yield of 6.044 percent.
On Tuesday, P30 billion will be offered by the BTr for 20-year bonds, which were originally issued in February at a coupon of 6.25 percent.
The BTr rejected all bids at the auction last Tuesday of 20-year bonds—with a remaining term of 14 years and nine months—as the market tried to push the yield close to 7 percent. Had the entire offer been awarded, then the average rate for the long-term debt would have risen to 6.987 percent.
Government being the largest debt issuer, the interest rates it allows on money it borrows sets a benchmark for bank loans and corporate borrowings.
