The government rejected tenders for all treasury bills on Monday amid tepid demand for short-term securities.
National Treasurer Roberto B. Tan in an interview described most of the bids as “not serious,” saying that these kinds of offers showed that investors had no interest in the T-bills offered.
“The market is unsettled and there is volatility,” Tan said. “Buyers are fence-sitting, waiting for new developments that would show more clearly where interest rates are headed.”
Had the Bureau of the Treasury accepted tenders and awarded fully its offering that added up to P9 billion, the average yield on all three tenors would have gone up by at least 200 basis points.
Yield on the benchmark 91-day bill would have reached 2.775 percent, or 208.5 basis points higher than the most recent 0.69 percent.
Rates on the 181-day bill would have risen to 3.296 percent, up 261.4 basis points from 0.682 percent.
Interest on the 364-day bill would have increased to 3.469 percent, or 233.6 basis points from 1.133 percent.
Tan said the government could well afford not to raise any new funds from Monday’s auction, adding that longer-term securities were, on the other hand, much in demand.
A fresh issue of 25-year treasury bonds auctioned last week attracted tenders that summed up to more than thrice the government’s offered volume.
On Monday, investors tendered a total of P3.862 billion for the P2 billion worth of available 91-day bills.
Buyers offered to buy only P2.22 billion worth of the 181-day bills amounting to P3 billion. They also tendered just P2 billion for P4 billion worth of 364-day bills.