T-bill rates fall across the board

Treasury bill rates fell across the board at Monday’s auction as the global uncertainty created by the downgrade of the US credit rating prompted fund holders to invest in short-term and perceivably risk-free assets like government securities.

Yield of the bellwether 91-day bills fell 23.3 basis points to 2.073 percent. Volume of bids reached P9.62 billion compared with the P2 billion that the government was selling.

The Bureau of the Treasury’s auction committee accepted only P2 billion worth of bids for the three-month securities, saying it did not see any need to raise more than originally programmed.

“The drop in the rates was a market reaction to what has happened to the US. Investors want to go for short-term and risk-free assets like T-bills,” Deputy Treasurer Eduardo Mendiola said.

Yield of the 182-day bills dropped 53.4 basis points to 2.25 percent. Bids for the six-month bills amounted to P11.08 billion, more than three times the P3 billion offered for sale. The auction committee accepted P3 billion worth of bids.

The rate for the 364-day bills settled at 2.75 percent, down 48.6 basis points. The one-year government securities attracted P13.77 billion worth of bids compared with the P4 billion on offer. The auction committee raised the full amount on schedule.

“Investors want to park money in T-bills than in other instruments. They wanted to buy more [T-bills], but there is no need for us to raise more,” Mendiola said.—Michelle V. Remo