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91-day T-bill rate now at 0.15%

Yields on all maturities fall to historic lows
/ 12:52 AM November 13, 2012

Interest rates on treasury bills fell Monday to historic lows for all three maturities following the continued favorable economic situation and ample supply of cash in the financial market.

After the regular auction held by the Bureau of the Treasury, the yield on the benchmark 91-day bills settled at 0.15 percent. The rate for the 182-day securities slid to 0.45 percent while that for the 364-day paper eased to 0.68 percent.

Data from the Treasury showed that these were the lowest rates seen in records that go as far back as 1987.


The latest rates were respectively 31.3 basis points, 25 basis points and 27 basis points lower than average rates recorded in the previous auction held two weeks ago.

Monday’s result for the benchmark bill was 25 basis points lower than the 0.4-percent average for done deals at the floor of Philippine Exchange and Dealing Corp.

In the secondary market, the prevailing rate for the 182-day bills was 22.5 basis points higher at 0.675 percent and for the 364-day bills, 14.5 basis points higher at 0.825 percent.

The Treasury raised a total of P7.5 billion as planned. Investors tendered a total of P21.91 billion, or almost thrice the total offering.

Deputy Treasurer Eduardo S. Mendiola said in an interview that all macroeconomic variables, including the inflation rate, remained favorable such that investors had “no reason at all to bid up.”

According to the National Statistics Office, inflation stood at 3.1 percent year on year in October, bringing the 10-month average to 3.2 percent.

“Tenders show the liquidity in the (domestic) market despite no maturities this week,” Mendiola said, meaning there were no government securities up for redemption. “There is an ample supply of funds running after financial instruments,” he added.

Mendiola said there was no decision yet on whether to proceed with a planned bond exchange exercise in the first week of December. “This will depend on the advice from a team that is overseeing the primary market’s adoption of globally accepted pricing standards, which the secondary market is already using,” Mendiola said.


He added that the planned debt swap is meant to help in the transition to a single-pricing regime in the financial sector.

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TAGS: Bonds and t-bills, Interest Rates, Philippines, treasury bills
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