91-day Treasury-bill rate drops to 3.965%

MANILA, Philippines – Rates for the benchmark 91-day Treasury bills (T-bills) went down by two basis points to settle at 3.965 percent from the previous rate of 3.985 percent.

Total tenders for this paper reached P5.780 billion, more than double the P1.5 billion sold by the BTr.

On the other hand, the 182-day debt paper fetched an average rate of 4.263 percent or one basis point above the previous rate of 4.253 percent.

Investors tendered a total of P8.67 billion for this paper, also more than double the P3 billion offered by the government.

The 364-day debt paper, meanwhile, fetched an average rate of 4.516 percent, 1.6 basis points higher than the previous rate of 4.500 percent.

National Treasurer Roberto Tan said the market is very liquid even as the government will start today the sale of at least P25 billion worth of retail Treasury bonds (RTBs).

“There’s a lot of liquidity in the market,” Tan told reporters yesterday.

The positive outlook on inflation also boosted the appetite of investors, Tan noted.

Inflation came in at 3.9 percent in July, lower than market expectations, the National Statistics Office (NSO) said.

Tan expressed hopes that investors’ optimism would also allow the government to sell at least P25 billion worth of RTBs in the scheduled price-setting auction today.

The issuance of RTBs is part of the government’s savings mobilization program designed to make government securities available to retail investors and at the same time create savings consciousness among Filipinos. With RTBs, investors can buy the debt paper for a minimum amount of P5,000.

When asked if the Treasury would cancel the scheduled auctions for T-bills and T-bonds, Tan said it would depend on the response of the market.
Proceeds of the debt sale would help fund the government’s widening budget gap, which is projected to hit P325 billion for this year and P298 billion in 2011. –Iris C. Gonzales (The Philippine Star)