T-bill rates up across the board

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday rejected all bids for the 91-day Treasury bills (T-bills), and partially awarded 182-day and 364-day securities as interest rates asked by the market rose across-the-board.

During yesterday’s auction, the BTr was forced to reject all bids for the 91-day securities after interest rates asked by investors averaged 5.067 percent, 66.3 basis points higher than the 4.404 percent recorded in the previous auction.

This is despite the slight oversubscription for the securities, with total tenders reaching P5.16 billion.

Meanwhile, the auction committee also capped the accepted bids for 182-day debt papers to temper the increase in interest rates.

As a result, P3.652 billion in tenders was awarded, fetching an average rate of 5.894 percent. This was 21 basis points higher than last week’s level of 5.684 percent.

Total tenders for the auction reached P6.752 billion, higher than the P5 billion offering.

Similarly, only P3.349 billion of the total bids for one-year debt notes was awarded yesterday after the auction committee decided to cut the accepted rates.

They fetched an average rate of 6.256 percent, 37.3 basis points above the 5.883 percent recorded last week.

The P6 billion offering was slightly undersubscribed, with total tenders amounting to P5.949 billion.

In an interview, national deputy treasurer Erwin Sta. Ana said the BTr decided to reject some tenders due to higher-than-expected rates.

“Generally, the bids came in higher than expected, hence the decision to fully reject the 91-day and partially award for the two other tenors,” he said.

He said the results of the auction may be attributed to continued market concerns on inflation and further rate hikes on the part of the US Federal Reserve.

“Based on the feedback from the surveys that we did and the Bangko Sentral ng Pilipinas to our government securities eligible dealers they are still factoring in inflation,” Sta. Ana said.

“There’s also some consideration on the rate hike trajectory of the Fed, (which is) expected to hike again once this year and three times next year,” he added.

As such, the official said some investors may have opted to wait on the sidelines for new developments.