T-bill yields rise across the board

Investors were on a wait-and-see mode ahead of US President-elect Donald Trump’s upcoming inauguration such that the Bureau of the Treasury’s auction was undersubscribed while rates rose across the board.

In all, the bids for the P15 billion in treasury bills offered reached only P11.99 billion while the Treasury sold only P9.09 billion.

For the reissued 91-day securities maturing on April 19, tenders amounted P4.35 billion for the P6-billion offering. As the average annual rate rose 22.5 basis points to 1.78 percent from 1.555 percent last month, the Treasury awarded only P3.7 billion.

The reissued 182-day debt paper maturing on July 19 fetched P4.66 billion in bids for the P5 billion offered by the Treasury. Only P4.21 billion were sold at an average rate of 2.037 percent, up 16.1 basis points from 1.876 percent last month.

As for the 364-day IOUs, investors tendered a total of P2.98 billion for the P4-billion offering. The Treasury awarded only P1.18 billion at an annual rate of 2.276 percent, up 39.6 basis points from 1.88 percent previously.

“People are still on the sidelines, waiting for some events. There was the Trump factor—some negative news from the market perspective came up with the incoming US president making some announcements. So what we did was follow the market trend based on price guidance and our attitude in this auction was to provide price guidance given the behavior of the Bangko Sentral ng Pilipinas on its borrowing rates, term deposit facility, and other indicators,” National Treasurer Roberto B. Tan told reporters after the auction.

Tan added that interest rates were on a positive trajectory. “We’re monitoring the market on a daily basis and there’s a lot of noise especially in the US market. We are affected, particularly in equities.”

Despite an undersubscribed auction and raising fresh funds less than the P20 billion in government securities maturing this week, Tan said the country’s cash position remained “good” at the moment.

Separately, Tan said the Treasury was looking at fewer banks to help the government sell up to $2 billion in global bonds early this year.

“We’re discussing with a couple of banks. We’ll probably look at smaller set of banks. We’d like to focus on a couple of banks, just focus. Before, we had a lead and we had support; now we’ll only have a lead,” Tan said. —BEN O. DE VERA