Global market jitters following Donald Trump’s win in the US presidential elections spooked investors in local government securities such that the Bureau of the Treasury rejected bids for the undersubscribed one-year debt paper it offered Monday.
The Treasury received only P4.46 billion in bids for the P6 billion in 364-day T-bills it had programmed to auctioned off, with the tenders eventually rejected “due to limited demand and higher than expected rates,” the agency said in a statement.
Had the Treasury accepted the undersubscribed bids for the IOUs maturing on Nov. 15 next year, the average rate would have jumped 58.8 basis points to 2.468 percent from 1.88 percent last month.
For the 182-day treasury bills, P4.4 billion was accepted out of the P6-billion offering, despite oversubscription with tenders reaching P6.8 billion.
As for the benchmark 91-day debt paper, the Treasury sold all P8 billion offered after fetching P19.29 billion in bids.
The rates for both the three- and six-month T-bills rose to 1.484 percent and 1.809 percent, respectively, from 1.281 percent and 1.505 percent previously.
Deputy National Treasurer Sharon P. Almanza told reporters after the auction that the higher rates came on the back of the expectations that the looming US Federal Reserve rate hike would finally push through next month, alongside “policy uncertainty” following Trump’s victory in the US presidential polls.
“These external developments added to sentiment,” Almanza said.
In all, tenders at Monday’s auction totaled P30.6 billion, with only P10.4 billion of the P20-billion offering eventually sold to investors.