The Bureau of the Treasury (BTr) only partly awarded its Treasury bill (T-bill) auction on April 6, as rising interest rates continued to influence how the government borrows, even with strong demand from investors.
The government raised P22.8 billion, below its P27.0 billion target, after deciding to limit how much it would accept for longer-term loans.
Total bids reached P50.2 billion — almost double the amount offered — showing that there is still plenty of money in the market despite higher interest rates. Short-term T-bills were fully awarded.
The 91-day paper had an average yield of 4.985%, while the 182-day paper settled at 5.080%. These shorter-term options were more attractive to investors.
Demand was especially strong for the 91-day T-bill, which received P26.66 billion in bids. However, a large portion — P17.66 billion — was rejected, meaning the government chose not to accept all offers, even if demand was high.
Treasury trims long-term awards amid rising yields
For the 182-day tenor, bids reached P16.55 billion, and the full P9.0 billion offering was awarded. Still, more than P7.5 billion in bids were turned down, showing that the Treasury remained selective as rates continued to rise.
In contrast, the one-year (364-day) T-bill was only partially awarded. The government accepted just P4.8 billion out of the planned P9.0 billion, even though bids reached nearly P7.0 billion.
The average yield climbed to 5.204%, the highest among the three, as investors asked for higher returns in exchange for lending money for a longer time.
By limiting awards for the one-year paper, the government is trying to avoid locking in higher borrowing costs while market conditions remain uncertain.
Rising oil, inflation fears reshape rates outlook
According to Michael Ricafort, chief economist at RCBC, interest rates have been rising for five straight weeks, partly due to tensions in the Middle East and higher global oil prices. These factors are increasing concerns about inflation, or the rising cost of goods.
Higher fuel prices could push inflation beyond the Bangko Sentral ng Pilipinas target range of 2% to 4%, which may lead to another interest rate hike in the coming months.
For fintech companies, digital banks, and investors, the results show a changing environment. Short-term investments are still more appealing, while longer-term ones are becoming riskier due to rising rates.
As global uncertainties continue, the Treasury’s careful borrowing strategy reflects a broader goal: raising funds while keeping costs manageable. This balance will play an important role in shaping liquidity and financial activity in the Philippines, including the growth of digital finance.
