BTr rejects all T-bill bids

Awash with cash following a highly successful offering of retail Treasury bonds (RTBs) earlier this month, the Bureau of Treasury (Btr) rejected all bids at yesterday’s Treasury bill (T-bill) auction.

"We can afford to reject (all bids) because we just raised P48 billion from the retail Treasury bond," Deputy Treasurer Mina Figueroa said yesterday.

The rates remained the same from the previous auction with the 91-day T-bills at 4.778 percent; the 181-day bills at 5.736 percent; and the 364-day bills at 5.856 percent.

The BTr offered an initial P8-billion worth of RTBs earlier this month but after heavy oversubscription it opened a tap facility to sell additional paper, giving it total proceeds of P48 billion.

National Treasurer Sergio Edeza said as a result of the successful exercise, the BTr is now planning to cut its borrowing program in the fourth quarter by canceling sales of P9-billion worth of T-bonds in December.

" The market bid up the rates, but with the huge amount received from the RTB sale they (Treasury) just rejected them," a local commercial bank trader said.

She added that T-bills, with average rates near historic lows, offer little incentive to the market at present."

"One bank has been offering T-bills for the past two weeks (in the secondary market) and there have been no takers," she said.

Meanwhile, in secondary trade, yields moved up across the curve with the most market gains on four- and five-year paper, which rose between 10-13 basis points.

Traders noted that the Brazilian factor and budget deficit worries continued to unnerve sentiment.

Concern about an upcoming election in the South American country has caused its sovereign bond prices to plummet, raising fears of a contagion impact on other emerging debt markets, including the Philippines.

Wider spreads for Philippine sovereign debt would mean the government would have less leeway to borrow abroad to supplement borrowings from the local debt market needed to finance the country’s sizable budget deficit.