BTr rejects all bids for 182-day bills; 91-day tenor up to 2.888%

MANILA, Philippines - The Bureau of the Treasury (BTr) rejected all bids for 182-day Treasury bills (T-bills) in an auction yesterday but partially accepted tenders for the 91-day paper and made a full award for the 364-day debt.

As such, the government sold P4.735 billion during yesterday’s auction, below the programmed offer of P9 billion.

National Treasurer Roberto Tan said results of the auction were mixed as investors are still waiting for what will happen on Thursday during the rate-setting meeting of the Bangko Sentral ng Pililipinas (BSP).

Last month, the BSP raised its policy rates to 4.5 percent for the overnight borrowing rate and 6.5 percent for the overnight lending rate from 6.25 percent.

 “I guess they’re still uncertain on what the policy action will be come this Thursday,” Tan told reporters after the auction.

The 91-day paper fetched an average rate of 2.888 percent from 2.264 percent previously or an increase of 62.4 basis points.

Investors tendered a total of P2.865 billion but the government only made a partial award of P735 million to tame the increase in rates.

The rate would have risen to 3.031 percent had the government opted for a full award of the P1.5 billion offer.

On the other hand, the government rejected bids for the 182-day paper. For this paper, the rate would have risen to 3.54 percent or 109.6 basis points higher than the previous rate of 2.44 percent.

 “There were mixed sentiment on the pricing of the 182-day paper,” Tan noted.

On the other hand, the 364-day paper fetched an average rate of 2.911 percent or higher by 87.9 basis points above the previous rate of 2.033 percent.

Total tenders amounted to P8.330 billion, allowing the government to make a full award of the P4-billion programmed debt sale.

The government has a program to sell P117 billion in T-bills and T-bonds this quarter, above the P114 billion programmed debt sale in the first quarter of the year.

Of the P117 billion, the government has programmed to sell P63 billion worth of Treasury bills from April to June and P54 billion worth of T-bonds.

The government issues Treasury bills and bonds to finance its budget deficit. This year, the government is eyeing to contain the budget deficit at P300 billion this year or 3.2 percent of total economic output.

Last year, the budget gap hit P314.4 billion or 3.7 percent of gross domestic product (GDP).