T-bill rates for all tenors up

The yield on the 91-day Treasury bill rose by 24.6 basis points to an average of 1.674 percent as the government allows the market to adjust to the prevailing “depressed” interest rates.

This happened as investors wait out offerings of long-term debt paper following the reduction of key policy rates. Last week, the Bangko Sentral ng Pilipinas cut its overnight borrowing rate by 25 basis points to 4.25 percent.

Tuesday’s average for the benchmark bill was 22.4 basis points higher than the corresponding 1.45 percent set for done deals in the secondary market.

Also, interest rates on the 182-day T-bill rose by 39.8 basis points to an average of 2.222 percent, although—as with the benchmark bill—the BTr did not fully award the volume on offer.

The resulting average was 29.7 basis points higher than the 1.925 percent prevailing rate at the Philippine Dealing and Exchange Corp.

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

National Treasurer Roberto B. Tan said in an interview that the auction results reflected the government’s desire for the local financial market to normalize.

“There is now an adjustment (of rates) taking place,” Tan said. “We are cognizant of what’s needed to be done, considering that (rates) are very depressed, especially in December.”

Even then, the Treasury chief said the government entertained only those tenders that were of significant volume, referring to those for the three- and six-month bills.

Tenders for the 91-day bill reached P4.88 billion, or less than twice the P2.5 billion offer.

Bids for the 182-day bill totaled P5.33 billion, also less than twice the P3 billion offer. Those for the 394-day bill reached P3.18 billion, less than the P3.5-billion offer.

The government raised a total of P3.56 billion, or just above a third of the planned P9 billion, as buyers tendered a total of P13.39 billion.

Had the government awarded all of its offers, the yield on the three-month bill would have shot up by 29.2 basis points to an average of 1.72 percent while that for the six-month bill would have added 48.5 basis point to 2.389 percent.

The yield on the one-year bill would have risen by 87.6 basis points to 2.953 percent.