BTR rejects bids for 91-day, 364-day T-bills

THE Bureau of Treasury (BTR) has partially awarded treasury bills on Monday, as market players anticipate another rate hike from the US Federal Reserve.

Data from the BTR showed that the Treasury raised P3.162 billion on Monday’s auction, after partially awarding 182-day bills. The

BTR, however, did not award any for the 91-day and 364-day bills during the day.

The amount tendered for both the 91-day and the 364-day bills showed mixed interest from investors, with the shorter tenor getting more tenders than offered while the longer tenor falling short of the offering.

Tenders of 91-day bills hit P5.9655 billion during the day’s auction while tenders for 364-day bills hit only P3.2 billion. The amount offered for both is at P5 billion.

Meanwhile, for the 182-day bills, the amount tendered hit P7.123 billion, also exceeding the P5 billion amount offered.

National Treasurer Rosalia V. de Leon said the results of the auction came as markets anticipate action from the Fed.

“Markets are asking for higher rates as the Fed is expected to deliver another large rate hike—even a full percentage point—determined to quell inflation,” de Leon said.

Rates were higher across the board for Monday’s auction, with 91-day bill rates hitting an average rate of 3.912 percent if fully awarded from the 3.349 percent in the previous week’s auction.

For the 182-day bills, rates hit 3.81 percent from the 3.634 percent in the previous week. While the 364day bill rates hit 4.89 percent if fully awarded from the 4.392 percent in the previous week.

The recent Asia Bond Monitor (ABM) by the Asian Development Bank (ADB) showed the impact of rate hikes on debt papers. (See “BSP ‘most aggressive’ in hiking policy rates,” by Cai Ordinario, Businessmirror, September 15, 2022.)

The ADB has said the aggressiveness in policy rate hikes by the Bangko Sentral ng Pilipinas (BSP) has led to an increase in the country’s 2-year bond yields.

The ABM showed that yields increased by an average of 74 basis points (bps) for bonds with maturities of two years or less. The largest increase in yields, the ADB said, was seen in 1-year tenor bonds at 134 bps, followed by the 6-month securities at 111 bps.