The government rejected all bids for the 182-day and some bids for the 91-day and 364-day treasury bills as the market, which manifested preference for equities over fixed-income instruments, sought interest rates that officials deemed unreasonably high.
The 91-day yield hit 2.383 percent, rising 23.5 basis points from the previously recorded 2.148 percent, as market players thought previous rates were too low and unattractive. The rate for the three-month debt securities could have been higher if not for the move of the Bureau of the Treasury to reject some of the bids.
The government was planning to raise P2.5 billion from the sale of the three-month debt paper, but accepted only P1.5 billion. The bids for the three-month securities were actually high at P4.53 billion, but officials said these did not indicate a generally strong appetite of the market as some players were asking for rates that were too high.
On the 182-day bills, the rate remained at the previously recorded 2.45 percent with the decision of the government to reject all bids.
The 364-day bills fetched 2.808 percent, higher by 5.8 basis points from the previous 2.75 percent.
The government was supposed to have raised P3.5 billion from the sale of the one-year bills, but decided to just accept P1.1 billion worth of bids to avoid an even higher interest rate. Total bids for the one-year securities amounted to P3.58 billion, but officials said some of the bids were throwaway bids given the very high interest rates sought.
“This could be an indication of preference for equities these days,” National Treasurer Roberto Tan told reporters after the auctions.
Economists said that improving global economic conditions, led by rising employment in the United States, have encouraged some investors to take in more risks by shifting to equities, which are higher yielding compared with fixed-income instruments like government securities.
Tan said the latest rates for the treasury bills were just about the same as those recorded in the secondary market. He said the Treasury did not want to accept bids that would have made the latest yields exceed those registered in secondary market.—Michelle V. Remo