The government made a full award of the Treasury bills (T-bills) it offered on Monday as yields dropped across the board on robust demand for short tenors and with sentiment getting a boost as global crude oil prices eased over the weekend amid renewed hopes for a de-escalation in the Middle East conflict.
The Bureau of the Treasury (BTr) raised P50 billion as planned from the T–bills it auctioned off as total tenders reached P134.519 billion or almost thrice the amount on offer, but slightly lower than the P138.41 billion in demand seen last week.
The Treasury borrowed P20 billion via the 91-day T-bills as bids for the tenor reached P56.861 billion. The three-month paper fetched an average rate of 5.059%, dropping by 4.5 basis points (bps) from 5.104% last week. Bids accepted had yields from 5.023% to 5.094%.
The government raised P20 billion in 182-day debt as tenders hit P48.8 billion. The average yield on the six-month T-bill was at 5.671%, down by 1.4 bps from 5.685% previously. Tenders awarded carried rates from 5.575% to 5.671%.
The BTr sold P10 billion in 364-day securities as demand for the tenor totaled P28.858 billion. The one-year paper fetched an average rate of 5.95%, declining by 1.6 bps from 5.966% last week. Accepted bid yields were from 5.9% to 5.973%.
Oil prices tumbled more than 5% on Monday after the US and Iran paused strikes over the weekend, raising hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.
Brent crude futures fell $5.70 or around 5.9% to $91.08 a barrel by 0804 GMT after briefly slipping under the key support level of $90 earlier in the session. US West Texas Intermediate crude was at $84.51 a barrel, down $4.80 or around 5.4%.
A number of analysts expect markets will remain supported if crude supplies continue to be disrupted by ongoing shipping risks in the Middle East and Russia’s war on Ukraine.
The government is looking to raise up to P50 billion from a dual-tenor Treasury bond (T-bond) offering on Tuesday. The BTr wants to raise P410 billion from the domestic market this month, or P250 billion via T-bills and P160 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.659 trillion or 5.4% of gross domestic product this year.
