Government held its regular monthly auction of bonds and treasury bills on June 27th. In recent months, government has been struggling to sell all of the financial instruments on offer, but the June auction had a more positive, although not entirely successful, result.
The auction offered a total of P1,750 million (T-Bills P1,150 million, bonds P600 million). Of these, P1,431 million (82%) were successfully allotted. This was an improvement from a 70% allocation in April and 54% in March. Once maturing T-Bills are accounted for, the auction raised P761 million for government, much improved from P178 million in May.
As before, there was upward pressure interest rates. Stop-out rates for 3-month T-Bills rose from 4.0% in May to 5.1% in June, and from 4.5% to 6.1% for 6 month T-Bills. This will intensify the upward pressure on interest rates in the banking sector.