T-bill rates mixed on 91-day preference

The Bureau of the Treasury (BTr) fully awarded yesterday the 91-day Treasury bills, but partially accepted bids for 182and 364-day securities, reflecting the market’s continued preference for shortterm debt papers.

During yesterday’s auction, the BTr fully awarded P9 billion worth of 91-day T-bills as interest rates declined 2.9 basis points to 2.995 percent from 3.024 percent in the March 12 auction.

The three-month notes were oversubscribed, with total tenders amounting to P16.12 billion.

Meanwhile, 182-day T-bills fetched an average rate of 3.206 percent, up 4.1 basis points from the 3.165 percent recorded the previous auction.

This is despite the partial award made for the securities, after accepted rates was capped at 3.25 percent. As a result, only P3.584 billion of the P6 billion original volume was awarded.

The T-bills were also undersubscribed, with only P5.834 billion tendered.

Lastly, the average rate for one-year securities rose 12.3 basis points to 3.434 percent from the 3.311 percent posted the previous auction, even after the auction committee cut the accepted rates at 3.55 percent.

The auction for P5 billion worth of 364-day T-bills was also undersubscribed with P4.979 billion in total tenders, of which P3.779 billion was awarded.

According to National Treasurer Rosalia de Leon, the results of the auction reflects the market’s preference for the shorter end of the curve.

De Leon, however, noted that the rate by which the interest rates increased is starting to temper down as compared to the previous auctions, with rates rising only at four to 12 basis points.

“Maybe the market is already continuing to digest (data) about the inflation path, as already conveyed by the BSP (Bangko Sentral ng Pilipinas) that in 2019, (it) will again tread back to the target of two to four percent,” the BTr official said.

“But of course, there’s news of the (US Federal Reserve) rate hike again, and of course, protectionist moves of the US,” she added.