Treasury bill rates up across the board

MANILA, Philippines – Investors’ appetite for government debt papers improved as seen during yesterday’s auction.

The 91-day Treasury bill (T-bill) rate fetched an average rate of 4.394 percent, 10 basis points higher than the previous rate of 4.294 percent.

The government’s auction committee awarded P1 billion worth of the paper as total tenders reached P2.395 billion.

The 182-day debt paper, meanwhile, fetched an average rate of 4.654 percent or 2.9 basis points higher than the previous rate of 4.625 percent. Total tenders reached P3.608 billion. The government accepted tenders amounting to P2.278 billion.

Similarly, the 364-day T-bill fetched an average rate of 4.748 percent, lower than the previous rate of 4.761 percent. For this paper, total tenders reached P6.795 billion as the government made an award of P3.5 billion.

National Treasurer Roberto Tan said auctions results were “generally positive.”

However, he said that there were some mixed reactions on the part of investors following the lower-than-expected rate cut by the Bangko Sentral ng Pilipinas (BSP) last week of 25 basis points.

Monetary authorities cut the central bank’s overnight borrowing rate to 4.75 percent and the overnight lending rate to 6.75 percent during last week’s meeting. Market investors are expecting a rate cut of 50 basis points.

“There’s also some wariness on the February inflation,” Tan told reporters after the auction.

The National Statistics Office reported last week that the country’s inflation rate in February stood at 7.3 percent, nearer the upper end of the 6.6 percent to 7.5 percent forecast range of the BSP and faster than the 7.1 percent recorded in January.

Inflation in December stood at eight percent, slower than the 9.9 percent in November.

Tan expressed hopes that investor appetite for debt papers would continue, saying that the Treasury is studying options on how to raise the additional P50 billion required to plug a wider-than-expected deficit of P177.2 billion from a previous ceiling of P102 billion.

“There are options. It depends on market appetite,” he said, adding that the issuance of retail treasury bonds is among the options.

He said that if ever this would push through, it could be done in the second half of the year.- Iris C. Gonzales, Philippine Star