Govt sells P9.6B in Treasury bills

On the heels of a lower-than-expected first quarter deficit, the Bureau of Treasury sold P9.6 billion worth of 91-, 182- and 364-day Treasury bills during Monday’s auction. “Generally, it’s a very positive auction turnout mainly because of the confluence of good news," said National Treasurer Roberto Tan after the auction. A week ago, Budget Secretary Butch Abad announced that the budget deficit for the first quarter would be lower than expected because of strong revenue collections and prudent spending by the administration. The government reported a deficit of P26.197 billion for the first quarter, a far cry from the P112 billion ceiling. “It’s pointing to a scenario where government management of the fiscal program remains very effective," Tan said. National Treasurer Roberto Tan added that even the uptick in rates in the 182- and 364-day bills were only reflections of market adjustments. The debt sale is part of the P117 billion borrowing program for the second quarter of 2011, of which P63 billion worth of Treasury bills and P54 billion in T-bonds will be sold from April to June. The 91-day bills fetched an average rate of 0.568 percent from 0.680 percent previously, declining by 11.2 basis points, but amounting to P6.431 billion despite the original offer of P1.5 billion. The 182-day bills, meanwhile, were reported to have an average rate of 0.950 percent, up from 0.898 percent prior or an uptick of 5.2 basis points. The bids amounted to P6.654 billion, almost double the programmed sale of P3.5 billion. The yield for the 364-day paper increased by 6.4 basis points to 2.032 percent from 1.968 percent. Bids reached a total of P8.740 billion, more than double the P4 billion that was initially offered by the national government. The Treasury Bureau may increase the volume of bids if the volume is less than 25 percent of all tenders. Treasury bills and bonds are issued by the government to finance its budget deficit. The Aquino government is keeping the budget deficit at P300 billion this year, or 3.2 percent of the gross domestic product (GDP). Last year, the deficit reached P314.4 billion or 3.7 percent of the GDP. — BC/VS, GMA News