91-day T-bill rate up 42.3 bps to 6.122%

The average rate of the 91-day Treasury bill (T-bill) went up by 42.3 basis points to 6.122 percent during yesterday’s auction while the 364-day paper fetched a rate of 6.414 percent, 69.7 basis points lower than the previous rate of 7.111 percent.

National Treasurer Roberto Tan said investors are again showing more appetite for government debt papers.

“We’re very happy with the results especially for the one-year paper as it was very much oversubscribed,” Tan told reporters after the auction.

For the 91-day paper, total tenders reached P5.920 billion as awards reached P1.3 billion.

The 364-day T-bill, meanwhile, was more than five times oversubscribed. Total tenders reached P14.2 billion as the government’s auction committee accepted P2.5 billion.

Yesterday’s auction capped the auction activities for the year, Tan said.

“We’re pleased that the market is now normalizing. Investors are gaining more confidence now and placing more cash in government’s securities,” Tan said.

He said that the easing inflation also helped improved investor sentiment.

The inflation rate in November again hit single digit, at 9.9 percent compared to October’s 11.2 percent, latest data from the National Statistics Office (NSO) showed.

Inflation stood at 11.8 percent in September 2008, after hitting 12.5 percent in August, its fastest pace in 17 years.

Tan said that easing inflation has positively contributed to the improvement in market sentiment.

“There has been some improvement in terms of domestic inflation, especially in the prices of local commodities such as oil. This is a very influencing sentiment in the financial markets,” Tan said.

He expressed hopes that the rates of the government papers would continue to ease next year on the back of improving investor sentiment.

Furthermore, he urged investors to place their cash in T-bills and bonds, saying that these are safe investment facilities.

Tan also said that fiscal authorities are also stepping up efforts to contain the budget deficit within the programmed ceiling of P75 billion amid the bleak global financial outlook.