The government rejected all bids for the 182- and 364-day treasury bills during the regular auction on Monday, with officials claiming that the rates sought by the market were unreasonably high.
The government accepted bids for the 91-day bills. For the auction committee, the rates wanted by the market for the three-month securities, although higher, were acceptable.
The new rate for the three-month bills hit 2.494 percent, rising 11.1 basis points from the yield registered in the previous auction two weeks ago.
The Bureau of the Treasury accepted all tenders for the three-month bills amounting to P2 billion.
Had the government accepted bids for the 182-day bills, the rate for these securities could have climbed 67.2 basis points to 3.122 percent. For the 364-day bills, the average rate could have risen by 47.8 basis points to 3.286 percent had the government accept the bids.
Total tenders for the six-month bills reached P1.4 billion, while those for the one-year paper amounted to P3.25 billion.
According to the Treasury, the market had no valid reason to ask for much higher rates given the favorable economic environment.
National Treasurer Roberto Tan said the market seemed to be concerned over inflation.
“The market is quite uncertain about the near future. Inflation is one concern for them [market players],” Tan said in a briefing after the auctions.
This concern was anchored on rising oil prices in the global market. But the central bank had said that so far, overall domestic inflation was expected to remain manageable at least over the short term, noting that latest estimates pointed to inflation falling within the target of 3 to 5 percent for this year and next.
Actual inflation in the first two months of the year averaged 3.3 percent.
The amount raised from Monday’s auction will help the government settle P8 billion worth of government securities maturing this week.