Benchmark Treasury bills up slightly to 3.866%

MANILA, Philippines – The government sold P5.34 billion worth of Treasury bills (T-bills) in an auction yesterday, less than the offer of P8 billion as the auction committee decided to settle for partial awards for the 91- and 364-day debt paper.

The average rate of the 91-day Treasury bill stood at 3.866 percent compared to the previous rate of 3.840 percent or a slight uptick of of 2.6 basis points. The government auction panel settled for a partial award of P1.230 billion out of an offer of P3 billion. Total tenders reached P4.45 billion.

Had the committee settled for a full award, the average rate would have risen to 3.883 percent.

Similarly, the Treasury also settled for a partial award for the 364-day T-bill, which fetched an average of 4.492 percent compared to the previous rate of 4.408 percent. The government had rejected all bids for this paper during the May 4 T-bill auction. The government sold P1.110 billion worth of the paper out of total tenders of P5.410 billion.

On the other hand, the government made a full award only for the 182-day Treasury bill, which fetched an average of 4.113 percent from the previous average of 4.077 percent.  Total tenders for this paper reached P6.430 billion. The government auction committee awarded P3 billion worth of the paper.

National Treasurer Roberto Tan said investors are on a wait-and-see stance, keenly awaiting a possible adjustment in policy rates by the Bangko Sentral ng Pilipinas (BSP).

“There are some market expectations that there might be some policy decisions by the BSP and that’s influencing market expectations,” Tan said.

He said that because of this uncertainty, investors prefer to park their funds in shorter-term securities.

Analysts said the Bangko Sentral ng Pilipinas (BSP) may raise key policy rates in the third quarter or later than expected given the prevailing benign inflation environment.

The country’s chief monetary institution has left its policy rates at historic lows of four and six percent for the borrowing and lending windows, respectively.

The National Statistics Office (NSO) has reported that the country’s annual inflation rate stood at 4.4 percent for April, unchanged from March and within the government’s goal to contain inflation between 3.5 and 5.5 percent. –Iris C. Gonzales (The Philippine Star)