Bellwether T-bill rate rises to 1.889%

MANILA, Philippines – The yield for the benchmark 91-day Treasury bill (T-bill) went up to 1.889 percent during yesterday’s auction as the government made a partial award of P1.4 billion out of total bids worth P2.980 billion.

The Bureau of the Treasury (BTr), however, rejected bids for the 182 and 364-day T-bills due to unreasonably high bids.

National Treasurer Roberto Tan said the average rates for the longer-dated papers were unreasonable unlike the bids for the three-month paper.

The average yield for the 91-day paper rose to 1.889 percent from the previous rate of 0.568 percent.

Total tenders amounted to P2.980 billion, allowing the government to make a partial award of P1.4 billion, lower than the P1.5 billion programmed sale.

Had the government auction panel accepted the bids for the longer-dated tenors, the average rate for the 182-day paper would have risen to 2.382 percent or an increase of 143.2 basis points over the previous rate.

Similarly, the average rate of the 364-day paper would have risen by 126.2 basis points to 3.294 percent had the Treasury accepted the bids.

Tan said investors are still uncertain on the rates for the 182 and 364-day debt papers.

“The market is still finding its way given the new policy rate,” Tan told reporters after the auction.

Tan said the rates fetched by the two debt papers were beyond secondary market rates and that if the Treasury accepted it, it would only be getting “loose change.”

“There’s no real demand because they’re still unsettled on what the 364-day rate should be. This time, everybody is just trying to get in. We felt that investors were not really determined to put in their money,” he said.

Volume for the 182-day T-bills amounted to P2.08 billion, below the offer of P3.5 billion and for the 364-day T-bills investors tendered a total of P2.97 billion or below the program of P4 billion.

Yesterday’s debt sale formed part of the P117 billion borrowing program for the second quarter of the year.

Of the P117 billion, the government has programmed to sell P63 billion worth of T-bills from April to June and P54 billion worth of T-bonds.

The government issues T-bills and bonds to finance its budget deficit. This year, the government is eyeing to contain the budget deficit at P300 billion or 3.2 percent of total economic output.

Last year, the budget gap hit P314.4 billion or 3.7 percent of gross domestic product. –Iris C. Gonzales (The Philippine Star)