Gov’t rejects all bids for 91-day T-bills

The government on Monday rejected all bids for the 91-day treasury bills while results for the other two tenors showed falling rates.

The yield on the 182-day bills was down 2.6 basis points to an average 2.274 percent while those for the 364-day securities was lower by 5 basis points at 2.45 percent.

National Treasurer Roberto B. Tan said Monday’s results showed investors’ continued preference for long-term debt paper.

The 91-day bills “are really short-term funds (and) they want some good returns,” Tan said. “We are of course willing to adjust if the (bids) are reasonable, but they are not even close to secondary market rates.”

Appetite for the three-month bills was also weak, with buyers tendering only P1.93 billion against the offer of P2 billion. Had the government awarded its offer fully, the average benchmark rate would have gone up by 72.1 basis points to 2.895 percent. That would have been higher by 69.5 basis points than the corresponding 2.2 percent in the secondary market.

Also, Monday’s resulting average for the six-month debt paper was 5.1 basis points lower than the corresponding 2.325 percent at Philippine Dealing and Exchange Corp. Further, the result for the yearlong paper was 7.5 basis points lower than the 2.525 percent average rate in the secondary market.

Both the 182- and 364-day bills were oversubscribed but tenders were less than twice the offer. Investors made available P3.6 billion for the P2-billion offer of six-month bills and P5.13 billion for the P3.5-billion offer for the yearlong paper.

Asked whether the Bureau of Treasury would lower the fortnightly offers of 91-day bills considering the lack of interest from investors, Tan said this would be studied. “We used to offer as low as P1 billion for the benchmark, but we increased the volume because (investors) wanted more 91-day T-bills,” he added. “However, the quotes that they are giving are not in line with secondary market rates.”