Rates of Treasury bill dropped to record lows in Monday’s auction amid the excess liquidity in the financial system and the decision of Standard & Poor’s to upgrade the country’s foreign debt rating.
The 91-day benchmark rate that banks use to price loans sank to 1.48 percent, the lowest since at least 1990, from 3.4 percent in the previous auction. The 182-day average yield declined to 1.983 percent from 3.941 percent and the 364-day rate slid to 2.394 percent from 4.165 percent. The Treasury sold P7 billion worth of offering against the total bids of P46 billion.
Deputy Treasurer Eduardo Mendiola told reporters Monday that the rate for the three-month government securities was the lowest that he has seen since he started conducting auctions at the Bureau of Treasury in 1995.
“The bases for the very favorable rates are the macroeconomic fundamentals, including the benign inflation, and the fact that policy rates were kept steady,” he said. “The high level of liquidity in the market is also prompting investors to look for government securities that they can invest in given the limited supply in the market.”
The auction was the second to the last to be conducted by the Treasury for the year.
Mendiola said Monday’s rates were lower than the done deals in the secondary market, where debt papers are being traded.
“I’d like to believe the credit rating upgrade also contributed to the good results. It should have a positive impact on the market,” he said.
Standard & Poor’s upgraded the country’s credit rating by one notch last week. Finance Secretary Cesar Purisima said the upgrade was a vote of confidence to the government.
Mendiola said it would now be difficult to push rates higher once they touched levels these low based on the usual behavior of the market.
“I think these rates would persist for as long as the macroeconomic fundamentals are holding at their current state. We are hoping the low rates in the short-term debt would also translate into the longer end of our issuances,” said Mendiola. –Elaine R. Alanguilan, Manila Standard Today
World Day for Safety and Health at Work
“Safety and health at work every day!”
Invoke Article 33 of the ILO constitution
against the military junta in Myanmar to carry out the 2021 ILO Commission of Inquiry recommendations against serious violations of Forced Labour and Freedom of Association protocols.
Accept National Unity Government
(NUG) of Myanmar.
Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideos
Monthly Observances:
March – Women’s Role in History Month
April – Month of Planet Earth
Weekly Observances:
Last Week of March: Protection and Gender Fair Treatment of the Girl Child Week
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Mar 25 – International Day of Remembrance of the Victims of Slavery and the Transallantic Slave Trade
Mar 27– Earth Hour
Apr 21 – Civil Service Day
Apr 22 – World Earth Day
Apr 28 – World Day for Safety and Health at Work
