T-bill rates rising

MANILA, Philippines  -The national government raised only P8.55 billion out of the P15-billion goal from the issuance of Treasury bills (T-bills) as investors remained cautious in the aftermath of bank failures in the United States.

The average rate on the benchmark 91-day T-bills rose 23.8 basis points (bps) to 5.149 percent from 4.911 percent last week.

In the auction held March 27, the committee awarded only P1.428 billion worth of 91-day T-bills out of the P5-billion offering.

Had the committee led by the Bureau of the Treasury gone with a full award, the average rate would have jumped 60.9 bps to 5.52 percent.

Also, the committee awarded only P2.125 billion out of P5 billion of the offered 182-day T-bills. The new average yield was 11.1 bps higher at 5.677 compared to the previous 5.566 percent.

The P5-billion offer of 364-day T-bills was fully awarded, and the average rate went up 12.3 bps to 5.987 percent from 5.864 percent.

Further, the fresh average rates were higher across the board compared to prevailing rates for corresponding done deals at the secondary market.

This was so at 18.2 bps for the 91-day T-bills compared to 4.977 percent at the Bloomberg Valuation Service.

Likewise, the new average for the six-month bills was 11.8 bps higher while that for the yearlong bills was 4.7 bps higher. Secondary market rates were pegged at 5.559 percent and 5.94 percent, respectively.

This week, all three tenors were oversubscribed, with lenders making available P6.048 billion for the 91-day bills, P6.635 billion for the 182-day T-bills and P11.579 billion for the 364-day bills.

First Metro and University of Asia and the Pacific Capital Markets Research said investors were being cautious after the failure of Silicon Valley Bank.

Since then, another American bank in Signature Bank folded while Credit Suisse—a globally systemically important bank or “too big to fail”—had to be absorbed by its larger rival UBS.

Philippine monetary authorities were quick to say that the domestic banking system was safe, having no material exposure to the failed banks—an assurance echoed by analyses from global financial services firms, think tanks and credit watchers. INQ

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