T-bill rates rise on partial award

MANILA, Philippines – The auction of Treasury bills yesterday yielded mixed results as the Bureau of the Treasury (BTr) partially awarded the 91-day and 364-day securities, and rejected bids for the 182-day notes.

The BTr capped rates for 91-day T-bills at 2.2 percent, resulting in an average rate of 2.189 percent or 6.3 basis points up from the 2.126 percent recorded in the previous auction last July 3.

However, the average yield was lower than secondary market rates for the same securities, which was recorded at 2.8264 percent the afternoon before the auction closed.

The P6-billion offering was oversubscribed, with total tenders amounting to P9.126 billion, but only P4.127 billion was awarded.

One-year securities, meanwhile, fetched an average rate of 2.995 percent after the BTr posed a stopout level of three percent. This is 6.9 basis points higher than the 2.926 percent yielded during the previous auction.

Total tenders for the P4-billion offering reached P5.93 billion, but only P2.32 billion was awarded.

On the other hand, the BTr rejected all P3.55 billion in bids for 182-day securities, due to “higher-than-expected rates.”

All bids resulted in an average rate of 2.678 percent, 18.2 basis points higher than the last auction’s level 2.496 percent.

National Treasurer Rosalia de Leon told reporters the results of the auction reflect the upward trend on the rates of government securities the past two weeks.

De Leon explained this is due to the collective pronouncements of the US Federal Reserve, as well as the central banks of England and Canada, indicating a policy tightening.

“(US Fed) Chairman (Janet) Yellen during her testimony in the US Congress also indicated that the rate increase will really continue but of course they’re already considering, at the same time, unwinding of the bond portfolio of the Fed,” she said in an interview after the auction.

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