BTr reject bids as T-bill rates soar

MANILA, Philippines — Rates for short-term government securities rose by over 100 basis points across the board, prompting the Bureau of the Treasury (BTr) to reject all bids as the domestic debt market continues to react to global developments.

It remains difficult for the Treasury to borrow from local investors after it rejected all offers for three, six and 12-month tenors.

This is the ninth straight T-bills auction wherein the Treasury failed to raise its intended amount of P15 billion.

As widely expected, the government is bearing the brunt of the nearly four-decade-high US inflation at 8.2 percent, as investors continue to demand high yields.  

The BTr continues to maintain that the government still has elbow room to reject bids that are untenable.

Still, this week’s auction result was a deterioration from last week’s T-bills on offer, where the government raised P3.965 billion.

Rates across the board were higher than the previous action, as well as secondary market rates.

Rates for the 91-day T-bills surged by 145 basis points to 4.82 percent. This is a significant uptrend from last week’s rate of 3.819 percent and that of the secondary rate of 3.37 percent.

The 182-day short-dated debt papers also saw rates pick up by 121.1 basis points to 5.226 percent from just 4.415 last week and the 4.015 percent reference rate.

The Treasury also denied all bids for the 364-day T-bills after rates averaged 5.862 percent, soaring by nearly 200 basis points.

Overall demand for the short-term securities was flat week-on-week.

Total bids reached P16.3 billion, the same level as last week, oversubscribing the auction by 1.09 times.

By tenor, bids for the three-month T-bills increased to P7.6 billion as well as for the full-year securities to P3.2 billion, but six-month tenor offers slid to P5.503 billion.

For this month, the Treasury aims to borrow P200 billion from domestic creditors.