Govt to sell fewer 91-day tenors in Q4

THE Bureau of the Treasury (BTr) is seen gradually reducing the volume of its weekly sale of the benchmark 91-day treasury bills (T-bills) under its fourth quarter borrowing program as the government shifts to longer short-dated debt notes.

Deputy Treasurer Eduardo Mendiola yesterday said the government prefers to sell more longer-term T-bills in the coming quarters as part of Aquino government’s new debt and liability management policy.

“We would prefer long-term (T-bills). We are gradually reducing the volume of short-term T-bills and increasing the long-term (short-dated) debt notes,” Mendiola said in an interview.

He nevertheless said 91-day debt papers would still be offered to the market in smaller volumes to continue providing supply for sectors using it as benchmark for lending.

“We would still offer it since its rate is used for benchmarking for short-term lending,” he said.

The yield fetched for the 91-day T-bills is used by commercial banks to price their loans. The 91-day notes were fetching a yield of 3.936 percent Monday from the previous 3.965 percent last August 10.

Mendiola nevertheless said the government’s fourth quarter borrowing would be of “the same tenor and volume” like in the third quarter.

He said the government does not see the need to drastically tweak the borrowing plan for the last quarter due to new funds raised from the recently-concluded sale of retail treasury bonds (RTBs).

The government raised a total of P97.5 billion from its 12th RTB issuance last week.

Mendiola said the proceeds from the RTB float were just enough to cover re-financing for the maturing RTBs this year while the excess of around P22 billion would serve as fresh supply to the market.

A total of P75.23 billion in combined three- and five-year RTBs would be maturing in August and September this year. Dino Ng

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