T-bill rates end mixed, 91-day papers swamped

Short-dated securities during yesterday’s auction fetched mixed results as investors asked for higher rates ahead of the Monetary Board’s policy meeting this week, the Bureau of the Treasury (BTr) said.

All bids for 91-day Treasury-bills (Tbills) were rejected by the auction committee due to the higher-than-expected interest rates placed by investors.

Had the BTr decided for a full award, the debt papers would have fetched an average rate of 3.49 percent, 16.7 basis points up from the 3.323 percent recorded the previous auction last week. This was also higher than the secondary market rate for the same securities, which settled at 3.3059 percent before the auction closed. “The rates are actually higher than secondary market and it’s also higher than the initial guidance from our GSEDs (government securities eligible dealers) so we felt like it’s not reflective of current market levels,” Deputy national treasurer Erwin Sta. Ana told reporters after the auction.

Total tenders for the T-bills reached P6.52 billion, slightly over the original issue size of P5 billion.

On the other hand, the BTr was able to successfully sell P4 billion worth of 182-day T-bills at an average rate of 3.766 percent. This was 5.2 basis points higher than the 3.714 percent fetched by the same securities last week.

The auction was almost twice oversubscribed, with bids reaching P7.106 billion.

Lastly, debt papers maturing in 364-days were only partially awarded to temper down the increase in rates asked by investors, Sta. Ana said.

As a result, the BTr was able to raise P4.356 billion, lower than the issue size of P6 billion. The securities were sold at an average rate of 4.357 percent, 3.3 basis points up from last week’s 4.324 percent.

The one-year securities met healthy demand, with total tenders amounting to P8.73 billion.

According to Sta. Ana, Treasury-bills registered increases in their interest rates due to developments in both the domestic and international market.

“We think the market is actually waiting for the results of the Monetary Board meeting this week, and of course, the hawkish comments of the Fed (US Federal Reserve) last week actually had some bearing on the bids today,” he said.

Meanwhile, the deputy treasurer said the government’s planned samurai bond issuance has already been approved by the Monetary Board of the Bangko Sentral ng Pilipinas. He said the BTr is just waiting for the special authority from the President.

Sta. Ana said the BTr is also completing the documentary requirements to be submitted to Japanese regulators for their approval.