The government again rejected all tenders for the benchmark 91-day as well as the 364-day Treasury bills as lenders continued to ask for rates that could have jacked up interest by more than 200 basis points (bps).
“Rates on the short end were very sensitive to aggressive actions by the United States Federal Reserve,” National National Treasurer Rosalia de Leon told reporters.
De Leon was referring to last week’s 75-bps policy rate hike by the US Fed, for the third consecutive time, bringing the cumulative increases to 300 bps to the range of 3 percent to 3.25 percent.
Also last week, the US Fed hinted at further rate increases amid continuously high inflation. Rising US interest rates have made US debt paper more attractive than others due to higher interest rate income.
On Tuesday, the auction committee led by the Bureau of The Treasury raised only P3.35 billion out of the total P15-billion goal or P5 billion for each tenor.
This amount represented a partial award to investors of the P5-billion offer of the 182-day debt paper.
The interest rate for the six-month T-bill increased by 14.8 bps to an average of 3.958 percent from 3.81 percent. This was 25.4 bps higher than the 3.704-percent prevailing rate at the secondary market.
Had the committee fully accepted the tenders for the 91-day T-bill the benchmark rate would have surged by 207.9 bps to average at 4.397 percent from 2.318 percent in the previous award last Sept. 5.
Similarly, a full award would have raised the rate on the 364-day debt paper by 110.6 bps to an average of 4.888 percent from 3.782 percent last Aug. 22.