INQUIRER FILE PHOTO
After four weekly auctions with no sale, the government finally awarded 91-day Treasury bills (T-bills) to lenders, but only a portion of the volume offered.
There was also a partial award for the 182-day T-bills, but full rejection of tenders for the 364-day debt paper.
The auction committee led by the Bureau of the Treasury raised P1.27 billion or just a quarter of the P5-billion offer of the benchmark T-bills.
Average rates for the 91-day T-bills went up by 150.1 basis points (bps) to 3.819 percent.
The committee also raised P2.695 billion or more than half of the P5-billion offer of the 182-day T-bills.
This was the first award, though again partial, of the six-month T-bills after two weekly auctions. Average rates went up by 45.7 bps to 4.415 percent.
Respectively, these were 63.8 bps and 76.5 bps higher than the prevailing secondary market rates of 3.191 percent for the three-month debt paper and 3.65 percent for the six-month debt paper.
Long-term tenders rejected
Also, Monday was the 7th weekly auction where all tenders for the year-long T-bills were rejected following a partial award last Aug. 22.
If the offer was fully awarded, or all tenders accepted, the average rate on the 364-day T-bills would have gone up by 161.9 bps to 5.401 percent.
Monday’s results summed up at P3.965 billion raised or less than a third of the P15 billion on offer.
“Given the national government’s good revenue performance, we have latitude to reject tenders should we find rates not reasonable,” National Treasurer Rosalia de Leon told reporters.
For the three tenors, investors made a total of P16.3 billion, with the 364-day T-bills undersubscribed with only P3.08 billion tendered.
During the annual meetings of the World Bank group last Sept. 29, World Bank president David Malpass said developing countries are in the middle of one of the most internationally synchronous episodes of monetary and fiscal policy tightening of the past five decades.
Malpass said that, to curb the damaging inflation stemming from food, energy, and other imported and domestic goods and services, central banks in developing countries are parompted to raise interest rates and their private sectors will be facing much higher borrowing costs.
“This effect is being amplified as the search for yield becomes a search for safety, accelerating capital outflows and a depreciation of domestic currencies,” he said. “Moreover, the aversion to long-term investment risk is growing.” INQ