As banks kept money in anticipation of heavy withdrawals during the Christmas holiday rush, the Bureau of the Treasury on Monday awarded only P4 billion in 91-day T-bills while rejecting bids for the two longer tenors.
National Treasurer Rosalia de Leon also told reporters there would no longer be a global bond sale before year-end. The dollar-denominated bonds would likely be sold early next year, a trend the Philippine government has been following in recent years.
In the last Treasury auction for the year, the benchmark 91-day was awarded an average rate of 5.323 percent, down from 5.35 percent last week.
Investors tendered P6.575 billion for the three-month government securities.
But the Treasury rejected tenders for the P5 billion in 182-day as well as P6 billion in 364-day IOUs as average rates would have climbed to 6.594 percent (from 6.344 percent) and 6.86 percent (from 6.585 percent), respectively, had full awards been made.
Bids for the six-month debt paper reached P5.884 billion, while the one-year securities fetched P6.855 billion.
In all, tenders across the three tenors totaled P19.3 billion, making the auction oversubscribed.
De Leon said investors were still awaiting the results of the US Federal Reserve’s interest rate decision on Wednesday.
“A lot of banks are holding onto their cash given a lot of heavy withdrawals this time—they would prefer to stash cash rather than put into securities. That’s why it’s better for them to also just bid for the 91-day rather than the longer the 182- and the 364-day,” she added.
De Leon added the government would not anymore embark on the planned global bond sale before yearend.
“Sarado na ang tindahan (the store is already closed),” she said, noting the government currently has a strong cash position.