The government rejected bids for 182-day treasury bills, while rates for the 91- and 364-day bills rose amid speculations that the era of historic low interest rates is over.
In the first auction of government securities for the year, the Bureau of the Treasury rejected bids for the six-month debt instrument in the belief the rates sought by the market was unreasonably high.
“The rates the banks were asking for the debt paper were out of line, as they were much higher than rates in the secondary market,” National Treasurer Rosalia de Leon told reporters after the auction.
Under the borrowing program, the BTr was supposed to raise P6 billion from the sale of 182-day bills in the auction Monday.
Had it accepted the bids, the rate for the six-month debt instrument would have risen by 1.514 percentage points, or from below 1 percent to 1.515 percent.
The Treasury accepted bids for the 91-day and 364-day bills, although such a move likewise led to an increase in their rates.
De Leon said the increase in the rates for the three-month and one-year T-bills was acceptable as those were comparable to the rates in the secondary market.
The rate for the 91-day bills rose by 69.2 basis points to 0.693 percent.
Bids for the three-month debt paper amounted to P5.095 billion, but the government accepted only P4 billion to stick to what was stated in the borrowing program.
The rate for the 364-day bills rose by 80.1 basis points to 1.079 percent.
Bids for the one-year debt paper reached P4.66 billion, but the Treasury accepted only P3.11 billion worth of bids.