Partial award as T-bill rates rise

MANILA, Philippines — The government only made a partial award of P7.1 billion in short-dated Treasury bills (T-bills) as investors demanded higher yields.

Results were mixed during yesterday’s T-bills auction as the Bureau of the Treasury made a partial award of P7.07 billion out of the P15 billion on offer.

This is an improvement from all the rejected bids from last week’s T-bills on offer – P5 billion each for three, six, and 12 months.

Yields for 91-day T-bills declined by 6.5 basis points to 2.318 percent, a downward movement from last week’s rate of 2.685 percent.

Still, the Treasury only awarded P4.543 billion out of the P5 billion on offer.

Similarly, only P2.525 billion was raised for the 182-day short-dated debt papers as rates picked up by 15.5 basis points to 3.485 percent.

The Treasury rejected all bids for the 364-day T-bills after rates averaged 4.356 percent, soaring by 46.5 basis points.

Nonetheless, yields for all the tenors went down on a weekly basis.

National treasurer Rosalia de Leon said “rates are way above current levels” thus, the partial award.

Overall, demand for the short-term securities jumped by 54 percent week-on-week.

Total bids reached P26.653 billion, oversubscribing the auction by 1.78 times. This is better than last week’s P17.289 billion in demand.

By tenor, bids for the three-month, six-month and full-year securities all went up, totaling to P10.923 billion, P10.629 billion and P5.101 billion, respectively.

Based on the borrowing plan for September, the government targets to raise P200 billion from the domestic debt market this month. Of this, P60 billion will come from short-dated T-bills.