All T-bill yields now below 1%

National Treasurer Roberto B. Tan: Rates in the primary market are still going down PHOTO FROM GEPCSET.DOF.GOV.PH

Yields on treasury bills fell Monday across the board, bringing the rates for all three maturities below one percent.

The interest on the 91-day treasury bills continued to slide, settling at 0.463 percent, or a decrease of 24.9 basis points. Monday’s result for the benchmark bills was also 21.2 basis points lower compared to the corresponding 0.675-percent average rate for done deals at the floor of Philippine Exchange and Dealing Corp.

The yield on the six-month securities fell by 35 basis points to 0.7 percent while the rate for the one-year bills slid by 40 basis points to 0.95 percent.

In the secondary market, prevailing rates for the 182-day bills was 31.5 basis points higher at 1.015 percent and for the 364-day paper, 31 basis points higher at 0.95 percent.

The Bureau of the Treasury raised a total of P7.5 billion as planned. Investors tendered a total of P24.56 billion, or more than thrice the total offering.

National Treasurer Roberto B. Tan said in an interview that rates in the primary market were still going down as the country’s economic fundamentals and the government’s fiscal performance continued to get stronger.

The Treasury last week reported that the budget deficit for January to September reached P106.1 billion, which was just 58 percent of the P183.3-billion target. However, the nine-month deficit was twice the P53 billion that was recorded in the same period of 2011.

“Even if the budget deficit has increased, it is still in a manageable level so the market is not expecting the government to borrow aggressively,” Tan said. “Also, we have just (wrapped up) the issuance of retail treasury bonds (RTBs) and the market knows we are not in a situation that we are looking for cash.”

Earlier this month, the Treasury announced that it raised a total of P188 billion from the sale of 25-year RTBs, including P125.01 billion through the selling agents during the eight-day public offering period and P62.99 billion that was sold to the selling agents themselves through a rate-setting auction.

On Monday, tenders for the 91-day bills reached P5.86 billion, or almost six times the P1-billion offer. Bids for the 182-day securities totaled P9.55 billion, or almost four times the P2.5-billion offer. Those for the 364-day paper reached P9.15 billion, or more than twice the P4-billion offer.