Government rejects bids for 91-day T-bills

The Bureau of the Treasury (BTr) rejected all bids for the 91-day Treasury bills (T-bills) during yesterday’s auction after banks offered unreasonably high rates.

The average rate for the three-month paper would have risen to 3.809 percent from 3.672 percent previously had the government accepted banks’ bids. The government offered P1.5 billion worth of the 91-day T-bills.

Yields on the 182-day and 364-day T-bills, on the other hand, fell after the auction committee made partial awards.

The average rate for the six-month paper fell to 4.637 percent from 4.692 percent previously. Total tenders reached P4 billion while the government awarded P2 billion worth of the paper.

Similarly, the average one-year rate dropped to 5.558 percent from 5.567 percent previously. The government awarded P1.195 billion worth of the paper as total tenders reached P3.145 billion.

Finance Undersecretary and Acting National Treasurer Roberto Tan said the BTr decided to push through with yesterday’s auction for liquidity purposes but noted that investors did not seem interested.

Last week, Tan had said the BTr may cancel its two remaining auctions for December including yesterday’s sale given the better-than-expected proceeds from the sale of the government’s stake in PNOC-Energy Development Corp. (PNOC-EDC).

“The ones who are holding the bills right now want to retain their gains so there is supply scarcity. We are opening it up for liquidity but apparently they are not interested,” Tan told reporters after yesterday’s auction.

The government has raised P58.5 billion from last week’s sale of its stake in PNOC-EDC, the country’s top geothermal firm.

Red Vulcan Holdings Corp., a consortium led by First Gen Corp. of the Lopez Group has bagged the government’s 60- percent stake in PNOC-EDC. The consortium offered a bid of P58.5 billion, topping other offers including a bid from the Filinvest group amounting to P48.52 billion.

The P58.5-billion winning bid exceeded government expectations. Originally, the Department of Finance expected to raise P32 to P36 billion from the PNOC-EDC auction.

Despite the rosy figures, however, investors have raised concerns on the country’s peace and order situation following a failed mutiny last week.

On Thursday last week, Sen. Antonio Trillianes IV and former Scout Ranger chief Brig. Gen. Danilo Lim and several other supporters walked out of a hearing in Makati and gathered at the Manila Peninsula hotel to drum up support for another people power style revolt but authorities later forced them out of the hotel.