Treasury bill rates up slightly for all tenors

MANILA, Philippines – Treasury bill (T-bill) rates went up slightly across the board at yesterday’s auction due to poor investor appetite for government debt papers following a disappointing first quarter economic growth of 0.4 percent.

The average rate for the 91-day T-bill went up by only 7.1 basis points to 4.383 percent from the previous rate of 4.312 percent.

The government’s auction committee awarded P750 million worth of the paper as total tenders reached P1.5 billion.

The committee decided to settle for a partial award, as the rate would have risen to 4.445 percent had the government awarded in full the offering of P1.5 billion.

For the 182-day paper, the average rate rose to 4.574 percent from a previous rate of 4.504 percent, up by seven basis points. Total tenders reached P2.810 billion as the government awarded P1.01 billion worth of the paper.

Had the government awarded the P2.5 billion-offering in full, the rate of the 182-day paper would have risen to 4.636 percent or 13.2 basis points.

The average rate of the 364-day paper, meanwhile, rose by only five basis points to 4.734 percent from 4.684 percent previously after the government made a partial award of P2.55 billion out of an offering of P3.5 billion. Had the government awarded the paper in full, the average rate would have risen to 4.783 percent or 9.9 basis points higher. Total tenders reached P3.95 billion.

National Treasurer Roberto Tan said investors are trying to see if the government would be willing to allow T-bill rates to go up as it needs to have more funds to pump-prime the economy.

“The market is testing the government because of the not-so-positive gross domestic product (GDP) growth announcement,” he said.

The National Statistical Coordination Board (NSCB) reported that the country’s gross domestic product (GDP) grew by 0.4 percent in the first quarter compared to the 3.9 percent growth recorded in the same period last year. The government had expected first quarter economic growth to range from 1.8 percent to 2.8 percent. –Iris C. Gonzales, Philippine Star