91-day T-bill yield down 166 points
Limited award of 1-year debt paper due to high rateBy Michelle V. Remo
Philippine Daily Inquirer
The government rejected some bids for the one-year treasury bills in Monday’s auction, as it deemed the interest rates sought by banks unreasonably high.
It is, however, apparently pleased with the market’s appetite for the three- and six-month bills.
The 91-day T-bills fetched 2.008 percent, falling by 16.6 basis points from the previous rate of 2.174 percent. The decline was attributed to strong demand for the paper, with tenders reaching P4.095 billion compared to the government’s offering of only P1 billion. Not wanting to over-borrow, the Bureau of the Treasury’s auction committee sold just P1 billion worth of the debt paper.
The 182-day T-bills fetched 2.172 percent, down by 10.2 basis points from 2.274 percent.
Demand for the six-month debt paper was also strong, with tenders hitting P5.05 billion. The auction committee accepted only P2.5 billion of the bids, sticking to its borrowing program.
T-bills fetched 2.488 percent, up by 3.8 basis points from the previous 2.45 percent. The rate could have been higher if the auction committee accepted the amount it was supposed to raise from the sale of the one-year debt paper.
The government sold just P3.2 billion worth of the one-year bills, instead of the P4 billion programmed.
National Treasurer Roberto Tan said banks had shown strong interest in the three- and six-month government securities because of recent favorable economic developments.
The move last week by Standard & Poor’s to raise the country’s credit rating from two notches to just one notch below investment grade has lifted the appetite of investors for peso-denominated instruments, economic managers said.
The benign inflation, which averaged only 3 percent in the first half of year, also boosted investor interest in the country, they said.
The full-year target is to keep inflation between 3 and 5 percent.
Tan said investor interest in the 364-day T-bills was lackluster. He said the market was betting more on the shorter-dated instruments given lingering uncertainties in the global economy, which could dampen the performance of emerging markets like the Philippines.
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