Yield on treasury bills drops across the board

The yield on treasury bills dropped across the board on Monday, with the 91-day bill falling by 32 basis points to an average of 2.174 percent.

The Bureau of the Treasury raised P9 billion as planned, with investors tendering a total of P18.86 billion, or more than twice the total offer.

Monday’s average for the benchmark bill was 2.4 basis points higher than the corresponding 2.15 percent set for done deals in the secondary market.

Also, interest rates on both the 182-day and 364-day T-bill fell by 14.2 basis points to an average of 2.258 percent, and by 1.6 basis points to 2.584 percent, respectively.

At the Philippine Dealing and Exchange Corp., the resulting averages were 6.7 basis points lower than the 2.325 percent for the six-month debt paper, and 8.6 basis points over the 2.5886 percent for the year-long paper.

National Treasurer Roberto B. Tan said in an interview that the falling interest rates came about just as most of the country’s economic indicators turned positive.

“These include inflation and the fiscal performance relative to the budget deficit,” Tan explained. “In terms of the cash position, (the government is) in good shape.”

Last week, the BTr reported that the government posted a budget deficit of P33.91 billion in the first quarter. It was about 41 percent of the P82.81 billion that the government intended to spend on top of national budget for that period.

But the three-month deficit was 29 percent more than the P26.2 billion recorded in the same period of 2011.

From January to March, expenses reached P394.88 billion, which was P45.7 billion short of what had been programmed, but still 52.7 percent higher year on year.

On the other hand, revenue in the first three months totaled P360.97 billion. It was P3.2 billion more than the target set and 11.7 percent higher than that of last year.

Tan said the funds raised from yesterday’s exercise would be used to redeem debt notes worth around P20 billion, including P13.2 billion in bills and P7 billion in bonds.

Tenders for the 91-day bill reached P5.62 billion—almost thrice the P2-billion on offer.

Bids for the 182-day bill totaled P6.4 billion, or more than thrice the P2-billion on offer, while those for the 394-day bill reached P6.7 billion—almost twice the P3.5 billion offered.