91-day T-bill rate down to 2.306%
The government rejected all bids for the one-year treasury bills due to limited volume of competitive offers.
The Bureau of the Treasury, which conducts borrowing activities for the national government, was originally planning to raise P4 billion from the sale of one-year bills. With the rejection of bids, the yield for the one-year government securities stayed at the previous rate of 3.236 percent.
Bids for the bellwether 91-day bills were much more than the government’s offering, manifesting investor preference for the very short tenor. The government accepted P2 billion worth of bids, consistent with the original borrowing plan.
The yield for the 91-day bills stood at 2.306 percent, down 19.5 basis points from the previous rate of 2.501 percent as demand for these securities were strong. Bids for these bills amounted to P8.03 billion, four times more than the government’s P2-billion offering.
Bids for the six-month bills reached P5.88 billion, exceeding the government’s debt offering of only P3 billion. The treasury bureau accepted the scheduled P3 billion worth of borrowing.
The rate for the 182-day bills reached 2.784 percent, up 2.5 basis points from the previous rate of 2.759 percent.
National Treasurer Roberto Tan said investor appetite for the three-month bills and lack of interest in the one-year securities indicated their wait-and-see stance.
The Bangko Sentral ng Pilipinas will decide on Thursday whether or not to raise its key policy rates, which affects commercial interest rates.
Tan said the market wanted to determine first whether the BSP would again raise rates before making a bet on securities with maturities longer than 91 days.
The BSP has already raised its key policy rates by a total of 50 basis points this year in a move to temper inflationary pressures. Central bank officials said that without such moves, average inflation for this year could exceed the 5-percent target ceiling.
The BSP said it was monitoring factors, both domestic and external, that could affect domestic price pressures to determine whether another interest rate increase was necessary.
