91-day treasury bill yield up by 58.7 pts

The yield on the 91-day treasury bill rose by 58.7 basis points to an average of 1.556 percent, as investors continued to show their preference for long-term government securities.

Monday’s average for the benchmark bill was 5.5 basis points higher than the corresponding 1.5 percent set for done deals in the secondary market.

Also, interest rates on the 182-day T-bill rose by 62.6 basis points to an average of 1.83 percent, although the Treasury did not make a full award of its P3-billion offer.

The resulting average was 50.5 basis points higher than the 1.325 percent prevailing rate at the Philippine Dealing and Exchange Corp. at the time of the auction.

Further, the government rejected all tenders for the 364-day T-bill.

Finance Undersecretary Gil S. Beltran, who chaired the auction committee, said the auction results reflected the government’s desire for the local financial market to normalize.

“However, the acceptable levels (of tendered interest rates) represented too little in terms of funds that will be raised,” Beltran said, explaining why a partial award was made for the six-month bill and none at all for the one-year bill.

Beltran said the market showed indications that the debt problems in Europe, along with the threat of a chain reaction that would reach the domestic market, continued to fuel investor appetite.

The government raised P2.95 billion, or barely a third of the planned P9 billion, while buyers tendered a total of P16.08 billion.

Tenders for the 91-day bill reached P6.31 billion, while the offer was only P2 billion. Bids for the six-month bill totaled P5.15, while the offer was only P3 billion. Tenders for the one-year bill reached P4.62 billion.