The government on Monday rejected all tenders for the 91-day and 182-day treasury bills as investors pushed for higher rates too soon.
Also, the auction committee awarded just about two-thirds of its offering for the 364-day bill as the rest of the tenders were “unreasonably” higher than prevailing rates in the secondary market.
National Treasurer Roberto B. Tan said in an interview that the auction committee regarded most of the bids as asking for “very unreasonable rates even if these are meant to catch up from their very aggressive bids” in the previous auction held two weeks ago.
“The abruptness of the increase in yields being asked is quite unreasonable (and) disturbing,” Tan said.
“That is why we decided to reject (most of the bids),” he added.
He said even the most aggressive bids submitted on Monday were higher than those in the secondary market.
“They wanted to recover from the aggressive [or low] bids (they posted) two weeks ago,” Tan said. “The market is not as confident as it was before, but this is temporary.”
Had the government awarded all its P2-billion offer for the benchmark bill, the yield would have gone up by 40.1 basis points to an average of 2.575 percent.
The yield on the similar-sized offer for the six-month bill would also have gone up by 73.4 basis points to 2.992 percent if the entire offer was awarded.
As for the year-long debt paper, the yield went down by 6.6 basis points to 2.581 percent, with the government raising P2.4 billion instead of the planned P3.5 billion.
The resulting average was 13.2 basis points lower than the 2.65 percent prevailing at Philippine Exchange and Dealing Corp. at the time of the auction.
If it were a full award, rates would have gone up by 20.8 basis points to an average of 2.792 percent.
All tenors were oversubscribed as investors made available a total of P9.32 billion against the total offer of P9 billion.
Buyers tendered P2.97 billion, P2.4 billion and P3.95 billion respectively for the 91-day, 182-day and 364-day bills—all of which were less than twice the volume offered.