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By Chino S. Leyco, Reporter
THE national government is set to resume
issuance of short-term debt papers starting next month despite
Finance’s projection of rising domestic interest rates given the
skyrocketing commodity prices.
National Treasurer Roberto B. Tan said the
government has decided to resume auctions for shorter-term Treasury
bills, particularly the three- and six-month debt papers, in light
of renewed interest from investors.
Based on Bureau of Treasury’s bond offering
schedule, it will offer benchmark 91-day paper in July to September
with a total of P6 billion, 182-day T-bills at P6 billion and
one-year IOUs at P12 billion.
The 91-day T-bill rate is what banks use in
pricing their loans.
In July, the Treasury will offer to bid one
three-month, one six-month and two one-year T-bills at P3 billion
each.
Of the two scheduled auctions in August, one
will offer 91-day and 364-day T-bills at P3 billion each. And in
September, the government will sell 182-day and one-year dept paper
at P3 billion each.
The announcement of the bureau came a week after
Finance Secretary Margarito Teves said that interest rates were
likely to go up due to inflation rate, which is seen to breach the
double-digit level after it surged 9.6 percent last month.
But Tan said the T-bill come-back is due to “a
lot of interest” in the short-term windows.
“The market is looking for placements,” the
official said.
At Monday auction, the national government
borrowed in full the P6 billion in one-year T-bills on offer, with a
rate of 6.703 percent, or lower than the previous auction’s 6.79
percent. He said offering was over-subscribed as banks were willing
lend up to P13.446 billion.
The country’s treasurer also cited the
migration from other placements, including the special deposit
accounts (SDA) of the Bangko Sentral ng Pilipinas.
Marcelo Ayes, Rizal Commercial Bank Corp. vice
president, said the government may still get elevated yields in the
next quarter as inflation pressures brought by oil remains, adding
the bureau can expect banks to ask for 5.75 rate for the three-month
paper from March 5.026 percent.
“Oil prices is still very volatile,” Ayes
said.
The trader added the government received better
rates during Monday’s auction due to excess liquidity in the
market after SDAs matured. He sees interest rates to start moving
down starting in the first three months of next year.
For the third-quarter, Ayes said scheduled SDA
maturities are estimated to reach P100 billion.
The government, however, has set Treasury bonds
offering of P21 billion in July and P14 billion each in the
remaining months of the third quarter.
Next month, the treasury bureau will offer to
bid 5-year and 7-year and 5-year T-bonds at P7 billion each.
In August and September, it will offer two
7-year and two 5-year T-bonds at P7 billion each.
Total domestic borrowings by the national
government set for the third quarter is programmed to reach P85
billion, or higher than the previous quarter amounted to P84
billion.
In March, the bureau cancelled auctions of
three- and six-month T-bills scheduled for the second quarter due to
consistent failures amid high rates.
Local traders had said banks were favoring the
central bank’s SDA because it offered higher rates, but the BSP
has already shut down some of its SDA windows, particularly
short-tenor facilities.
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