91-day T-bill rate rises, longer tenors dropped

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday fully awarded P5 billion in 91-day Treasury bills (T-bills), but rejected all bids for 182 and 364-day securities as the market asked for higher rates amid continued concerns on domestic inflation and policy tightening.

During yesterday’s auction, the Treasury successfully sold P5 billion in 91-day T-bills at an average rate of 3.346 percent.

This was 15.5 basis points higher than the previous rate of 3.191 percent.

Total tenders amounted to P8.901 billion, higher than the original offering of P5 billion.

On the other hand, the auction committee rejected all bids for 182-day debt papers after the market priced the securities at an average rate of 3.683 percent.

This was 47.7 basis points up from the 3.206 percent fetched by the same securities the previous auction.

The six-month debt papers were undersubscribed, with total tenders amounting to P3.13 billion, lower than the P4 billion offering.

Lastly, the BTr also rejected tenders for 364-day T-bills as average rates asked by the market rose 43.6 basis points to 3.87 percent from 3.434 percent last April 2.

Tenders for the one-year securities reached P2.94 billion, less than half the P6 billion offering.

National Treasurer Rosalia de Leon said the auction committee decided to reject bids for the two longer tenor securities as the rate increase was higher than BTr estimates.

“We are not comfortable with those higher rates that they (the traders) are offering,” she said.

Nevertheless, De Leon said the government can still afford to reject bids as its cash position remains healthy.

The treasurer attributed the rate increase to the market’s concerns on domestic inflation, as well as expectations of policy tightening on the part of the US Federal Reserve.