Quantcast
Latest Stories

Treasury bill rates fall across the board

Excess liquidity moving to gov’t auctions

By

Treasury bill rates fell across the board as funds being withdrawn from special deposit accounts (SDAs) of the Bangko Sentral ng Pilipinas boosted demand for short-term government securities.

National Treasurer Rosalia de Leon said the enormous liquidity available in the domestic market led to the oversubscription of treasury bills across all maturities.

The rate for the bellwether 91-day paper dropped 23.4 basis points to 0.666 percent. Bids for the three-month government securities reached P19.21 billion even as the government was selling only P4 billion. The auction committee of the Bureau of the Treasury chose not to borrow more than what was scheduled. De Leon reiterated that the government had ample cash at the moment.

The rate for the 182-day bills fell 12.7 basis points to 0.873 percent. Bids for the six-month debt paper amounted to P20.8 billion, but the auction committee stuck with the borrowing plan and sold only P6 billion.

The rate for the 364-day bills declined 5 basis points to 1.2 percent. Bids for the one-year bills amounted to P13.98 billion compared with the government’s debt offering of only P10 billion.

“There was a lot of liquidity coming mostly from domestic sources,” De Leon said in a briefing after the latest monthly auction for treasury bills held Monday at the Treasury’s headquarters in Manila.

De Leon said some banks have started pulling out funds from SDAs in compliance with a directive from the Bangko Sentral ng Pilipinas. (See story on this page.)

“Banks were given until the end of the month to withdraw at least 30 percent (of the SDAs), so banks are already starting to unwind. Some of the SDA funds are going to government securities,” De Leon said.

About P1.4 trillion is expected to be covered by by the new SDA prohibition. Given this huge amount, De Leon said demand for other financial instruments, including government securities, could rise further in the coming months. As such, she said, there was a likelihood that interest rates on government securities would remain relatively low at least over the short term.

She said substantial liquidity in the domestic economy made the Philippine government less vulnerable to the outflow of foreign portfolio investments.

De Leon said the government was expected to stay liquid and be able to raise funds through the sale of securities even if foreign fund owners pull their money out of emerging markets, just like what happened in the past weeks.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , excess liquidity , oversubscription , special deposit accounts , treasury bill rates



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • What Went Before: Malacañang allies alleged involvement in pork scam
  • Timeline: Napoles tell-all
  • 12 senators on Napoles ‘pork’ list, says Lacson
  • Napoles surgery in Makati hospital successful
  • Save the queen? Aide takes fall for Enrile, Gigi Reyes
  • Sports

  • Mixers trim Aces; Painters repulse Bolts
  • Donaire junks Garcia as coach, taps father
  • ’Bye Ginebra: No heavy heart this time
  • UAAP board tackles new rules
  • Baguio climb to decide Le Tour de Filipinas
  • Lifestyle

  • The best flavors of summer in one bite, and more
  • Homemade yogurt, bread blended with pizza, even ramen
  • Visiting chefs from Denmark get creative with ‘ube,’ ‘ buko,’ ‘calamansi,’ mangoes
  • Salted baked potatoes
  • A first in a mall: Authentic Greek yogurt–made fresh in front of diners
  • Entertainment

  • Return of ‘Ibong Adarna’
  • Practical Phytos plans his future
  • In love … with acting
  • From prison to the peak of success
  • ‘Asedillo’ location thrives
  • Business

  • This time, BIR goes after florists
  • Philippine Airlines to stop shipment of shark fins
  • PH banks not ready for Asean integration
  • Stocks down on profit-taking
  • Banks allowed to use ‘cloud’
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • Editorial cartoon, April 24, 2014
  • Talking to Janet
  • Respite
  • Bucket list
  • JPII in 1981: walking a tightrope
  • Global Nation

  • PH seeks ‘clearer assurance’ from US
  • China and rivals sign naval pact to ease maritime tensions
  • What Went Before: Manila bus hostage crisis
  • Obama arrives in Tokyo, first stop of 4-nation tour
  • Believe it or not: Filipinos love US more than Yanks
  • Marketplace