BW FILE PHOTO

THE GOVERNMENT upsized the award of Treasury bills (T-bills) it auctioned off on Monday, with yields mostly inching up after June inflation slightly picked up but remained below target.

The Bureau of the Treasury (BTr) raised P28.4 billion from the T-bills, more than the P25-billion plan as the offer was more than thrice oversubscribed, with total bids reaching P87.486 billion. This was also higher than the P56.84 billion in tenders on June 30.

The BTr sold P7 billion as planned in 91-day T-bills as total tenders reached P30.547 billion. The three-month paper was quoted at an average of 5.526%, steady from the previous auction, with bids accepted having yields of 5.515% to 5.535%.

Meanwhile, the government raised P11.9 billion from the 182-day securities, above the P8.5-billion program, as bids reached P33.685 billion. Strong demand prompted the BTr to double the accepted noncompetitive bids to P6.8 billion, it said in a statement after the auction.

The average rate of the six-month T-bill was at 5.618%, rising by 1.1 bps from last week, with accepted yields at 5.593% to 5.625%.

The Treasury also raised P9.5 billion as planned via the 364-day debt as demand hit P23.254 billion. The average rate of the one-year T-bill inched up by 0.5 bp to 5.656%. Accepted bids had yields of 5.65% to 5.665%.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.4708%, 5.6616%, and 5.6999%, respectively, based on PHP Bloomberg Valuation service reference rate data provided by the Treasury.

“There was steady demand as T-bills offer higher yield than the shorter Bangko Sentral ng Pilipinas facilities, at least to those who have access to both products,” a trader said in a text message.

T-bill yields inched up on Monday after inflation remained below the BSP’s 2-4% target in June, Michael L. Ricafort, chief economist Rizal Commercial Banking Corp., said in a Viber message.

Inflation picked up to 1.4% in June from 1.3% in May but slowed from 3.7% a year ago.

This was within the central bank’s 1.1% to 1.9% forecast for the month and below the 1.5% median estimate in a BusinessWorld poll of 17 analysts.

June marked the fourth straight month that inflation settled below the BSP’s 2-4% annual target.

For the first six months, headline inflation averaged 1.8%, slightly higher than the central bank’s baseline forecast of 1.6%.

On Tuesday, the government will sell P30 billion in reissued 10-year T-bonds with a remaining life of seven years and two months.

The BTr wants to raise P250 billion from the domestic market in July — P125 billion in T-bills and P125 billion in T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.56 trillion or 5.5% of gross domestic product this year. — A.M.C. Sy