Rising yields hobble BTr in hitting ₧180B target

THE national government fell short of borrowing the whole P180 billion from the domestic market this month as rising yield continues to hound the Bureau of the Treasury’s (BTr) tenders for various securities.

Following its final auction for the month on Wednesday, the Treasury was able to raise P162.015 billion out of its P180 billion target amount this month from the auction of Treasury bills (T-bills) and Treasury bonds (T-bonds).

Broken down, the Treasury borrowed P53.636 billion through the T-bills and P108.379 billion via Tbonds locally.

The Treasury has earlier set a goal of raising P60 billion from Tbills auctions and P120 billion from

➜ Metrobank waives InstaPay fees

THE Metropolitan Bank & Trust Co. (PSE: MBT) announced it will waive InstaPay transfer fees until the end of September. In a statement, the lender said clients using its electronic app to send money transactions worth P1,000 and below will no longer be charged transfer fees. MBT said the initiative supports the thrust of the Bangko Sentral ng Pilipinas “to encourage more Filipinos to take advantage of the convenience of online payment transactions.” As of the first quarter of 2023, MBT’s capital ratios are among the highest in the industry, with total CAR at 17.6 percent and Common Equity Tier 1 (CET1) ratio at 16.8 percent. The bank’s consolidated assets stood the tender of T-bonds. Treasury data showed that out of the four T-bills auctions, it was only able to make full awards twice. Likewise, the Treasury made two full awards for the T-bonds auctions out of its four scheduled tenders this month.

The Treasury was forced to settle with mixed to partial awards in its remaining tenders as investors’ asking rates remained elevated and went beyond secondary benchmark rates.

Even during its last T-bonds auction for the month, the Treasury was unable to raise its full amount of P30 billion. The national government was only able to borrow P24.793 billion.

The Wednesday tender saw yield averaging at 6.328 percent, slightly higher than the 6.278 percent secondary market benchmark rate for a seven-year debt paper. The investors’ asking rates for the government security ranged between 6.125 percent to 6.49 percent.

“The Auction Committee partially awarded the new 7-year Treasury Bonds at today’s auction, setting the coupon rate at 6.375 percent. The auction was 1.8 times oversubscribed as total submitted bids amounted to P55.1 billion,” the Treasury said through a statement it issued after the auction.

The national government also missed its borrowing target from the domestic market last month.

(Related story: https://business- mirror.com.ph/2023/06/28/ ng-borrowing-goal-for-junemissed/)

For next month, the national government plans to borrow P225 billion from the local market. (Related story: https://businessmirror.com.ph/2023/07/25/ government-eyes-raising%e2%82%a7225b-in-augustfrom-gs-sale/)

For the whole year, the national government plans to borrow P2.207 trillion with a 75:25 mix in favor of domestic sources.

Some analysts believe the Philippine government can raise revenue from the sale of government securities if it follows the pace of the US Federal Reserve’s hawkishness.

Jasper Emmanuel Y. Arcalas