The Bureau of the Treasury yesterday rejected all bids for the P15 billion worth of T-bonds it offered as the market demanded higher rates ahead of the expected further rate hikes by the Bangko Sentral ng Pilipinas and the US Federal Reserve.
Average bid rates rose across the board—to 4.381 percent for the benchmark 91-day; 5.142 percent for the 182-day; and 5.643 percent for the 364-day.
The previous rates in last week’s auction were 3.966 percent, 4.597 percent and 5.4 percent, respectively.
“Furthermore, the 91- and 182-day tenors were undersubscribed as the majority of the P15.97 billion submitted bids were for the 364-day T-bills,” the Treasury said in a statement.
As such, the full rejection was blamed by the Treasury to rates that “came in higher than expected amid tepid demand.”
“The [auction] committee decided to fully reject all tenors because the committee believes that it will be more prudent to wait for the policy meeting of the Monetary Board this week and, of course, we also have the Fed meeting this week. So it could be a major factor for the participants to stay in the sidelines for a bit,” Deputy Treasurer Erwin D. Sta. Ana told reporters after the auction.
Noting that the 91- and 182-day IOUs were both undersubscribed, Sta. Ana said “it could be a manifestation of those two events happening this week.”
As for the 364-day debt paper, Sta. Ana said the rates were “inching higher and higher by the week, so it’s also an indication of the uncertainty at the moment.” —BEN O. DE VERA