Treasury bills succumb to market pressure

The Bureau of the Treasury awarded only P735 million of the benchmark bills, falling short of the P1.5 billion it offered.

The yield on the 91-day treasury bill still rose to an average of 2.888 percent even as the government tried to curb market pressure to raise rates. The average is 62.4 basis points higher than the 2.264 percent set in the previous auction held two weeks ago. It is, however, 23.7 basis points lower than the corresponding rate in the secondary market, which averaged 3.125 percent.

The Bureau of the Treasury awarded only P735 million of the benchmark bills, falling short of the P1.5 billion it offered.

Also, interest rates on the 364-day T-bill rose by 87.9 basis points to an average of 2.911 percent, while all tenders for the 182-day T-bill were rejected.

The average for the 364-day bill was 71.4 basis points lower than the prevailing best bids at the Philippine Dealing and Exchange Corp., which was 3.625 percent.

The BTr awarded the full amount of P4 billion in year-long bills.

National Treasurer Roberto B. Tan said the auction results showed that investors were still uncertain about the Bangko Sentral ng Pilipinas’ next policy rate move.

Market watchers disagree over whether policy rates would increase when the Monetary Board meets on Thursday.

The auction committee “approved a partial award on 91-day T-bills (as opposed to a full rejection of tenders) to support the market trend (of rising rates),” Tan said.

“We did not reject the tenders because the volume is good, which was almost double the offer. But overall, Monday’s auction was confused considering that bids for the 182-day bill were higher than the 364-day bill,” Tan added.

The government raised a total of P4.735 billion, about half of the planned P9 billion. Investors tendered a total of P14.505 billion.

Tenders for the three-month bill reached P2.865 billion—about twice the P1.5 billion offered.

Bids for the six-month bill reached P3.31 billion, less than the offer of P3.5 billion. Tenders for the year-long bill totaled P8.33 billion, more than double the offer of P4 billion.