Mixed results mark auction of T-bills

THE investors asking rates for short-term government debt papers rose to the third straight week, forcing Tuesday’s Treasury bills (T-bills) tender to end in mixed results with the government unable to borrow its full P15-billion target amount.

“Results were mixed in today’s Treasury bill auction as the Auction Committee decided to fully award bids for the 182-day and 363-day securities while partially awarding the 91-day T-bills,” the Bureau of Treasury’s (BTr) auction committee said in a statement on Tuesday.

The BTr successfully raised P13.6 billion from the T-bills auction, which was 1.3 times oversubscribed with total bids reaching P20.049 billion.

The Treasury made a full award of P5 billion each for the 182-day and 363-day T-bills while it partially awarded the 91-day T-bills amount- ing to P3.608 billion.

With the mixed results, Tuesday’s auction snapped the Treasury bureau’s four consecutive weeks of full award for T-bills. The 91-day T-bills fetched an average rate of 5.922 percent, higher than the previous week’s 5.827 percent.

Meanwhile, the interest rates for 182-day and 364-day T-bills averaged 5.978 percent and 6.062 percent, respectively, which were higher than their previous week’s level of 5.891 percent and 5.98 percent, respectively.

The average rates during the auction were also higher than their secondary market counterparts: 5.863 percent for 91-day T-bills; 5.901 percent for 182-day T-bills; and, 5.948 percent for 363-day T-bills.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort already added more agents to fasttrack the collection of outstanding dues.]

Veloso noted that the accumulated due and demandable loans of GSIS from its active and inactive members stood at P74 billion in 2016.

The COA in its annual audit report on the GSIS, which was made public recently, pointed out that active and inactive members of the state pension fund have an overdue obligations amounting to P45.583 billion.

Nonetheless, in a rejoinder included in its audit report, the COA commended the GSIS management for its efforts to “enhance” its system “to achieve a more effective collection facility.”

Furthermore, the COA said the said the uptick in the T-bills yields were caused by “higher” US treasury yields due to bigger supply as a result of the law passed raising the US debt ceiling.

GSIS has an uncollected outstanding private loans receivable of nearly P3 billion (P2.114 billion in principal and P823.153 million in interest) from some 21 private companies.

Veloso said the collaterals, which are mostly real estate properties, of the 21 companies that owe the GSIS over P2.1 billion are already under the state pension fund’s possession. Veloso explained that some of the properties are still under litigation.

“But all of these real estate are already with the GSIS,” he said.

“We are now having discussions on what is the best way to liquidate these properties. Is it through a joint venture? leasing? or to sell. We are crafting policies to address those,” he added.

“The markets recently priced in a possible 0.25 [basis points] Fed rate hike on July 26, 2023, as also signaled earlier by some Fed officials,” Ricafort said.

“As any future Fed rate moves— pause or hike—could be matched locally to maintain a healthy interest rate differential at +1.00 basis points to also help stabilize the peso exchange rate and overall inflation,” he added.

For the month of June, the Treasury aims to raise P185 billion from the sale of T-bills and T-bonds. The BTr plans to generate P60 billion from four auctions of T-bills and P125 billion from five auctions of T-bonds.

Jasper Emmanuel Y. Arcalas