The Bureau of the Treasury on Tuesday faced another setback in its plan to raise more funds locally amid the COVID-19 pandemic as it rejected high bid rates for the 35-day bills.
While tenders for the five-week IOUs amounted P29.62 billion or almost double the P15-billion offering, the debt paper was being bought at an average of 3.39 percent.
In a statement, the Treasury noted that the average rate was “higher than the prevailing rates of comparable government securities.”
National Treasurer Rosalia V. de Leon said that such short-dated IOUs were priced at a lower 3.01 percent in the secondary market.
Tuesday’s offering was the first time since 2004 that the Treasury auctioned 35-day securities.
As far as the Treasury was concerned, it still has “plenty of ammunition, that’s why we rejected bids for the short-dated debt,” De Leon said.
Since last week, the Treasury fully rejected tenders for a total of P85 billion in treasury bills and bonds even as the government had to shell out more money to support displaced workers, front-line health professionals and the economy as a whole during the monthlong quarantine to prevent the spread of the COVID-19 pandemic.
De Leon earlier attributed the high bid rates for government securities to investors’ preference to keep cash in their pockets during a crisis.
But De Leon said Republic Act No. 11469 or the “Bayanihan to Heal as One Act” signed by President Duterte last week contained measures ensuring that the government would have sufficient funds for COVID-19 response.
For one, the Deparment of Finance last Monday said that government-owned and -controlled corporations could unleash P200 billion in cash or its equivalent in various accounts, on top of national government agencies’ accounts outside the Treasury Single Account to implement the Bayanihan Law.—Ben O. de Vera INQ