BTr fully awards 91-day T-bill; partially awards 6-month, 1-yr paper

Rate of the 91-day paper averaged at 3.493 percent, lower than the 3.6643 percent in the secondary market after Monday’s morning session but higher than the 3.346 percent in the auction last April 10. (Photo Bureau of the Treasury/Facebook)

MANILA — The Bureau of the Treasury’s (BTr) auction committee made a full award for the benchmark 91-day Treasury bill (T-bill) on Monday but only partially awarded the longer tenors after banks asked for high yields.

Rate of the 91-day paper averaged at 3.493 percent, lower than the 3.6643 percent in the secondary market after Monday’s morning session but higher than the 3.346 percent in the auction last April 10.

This tenor was offered for Php5 billion but attracted tenders amounting to Php11.527 billion. The auction committee awarded Php5 billion.

On the other hand, only Php2.08 billion was awarded for the 182-day bill from the Php4 billion offering after bids totaled to just Php3.33 billion.

Rate of the six-month paper averaged at 3.684 percent, , lower than the 3.8933 percent in the secondary market. The auction committee rejected bids in the previous auction.

Also, Php1.735 billion worth of one-year T-bill was awarded Monday from the Php6 billion offering. Banks tendered a total of Php3.435 billion.

Average rate of the securities stood at 3.83 percent, lower than the 4.2786 percent in the secondary market. All bids were rejected in last week’s auction.

Deputy Treasurer Erwin Sta. Ana attributed banks’ demand for higher rates and preference for shorter-dated T-bill to expectations of more increases in the Federal Reserve rates this year.

“Basically we think that it’s about the hawkish stance of the Fed as well as the minutes (of the Federal Open Market Committee meeting last March that) have gone out last week. There are still, I think, reportedly the three rate hike cycles are still on the table,” he told reporters after the auction.

Sta. Ana said additional factors for investors’ demand for higher rates is the geo-political concerns in Syria after the US-led airstrikes as well as the uptick in domestic inflation rate.

He declined to say until when Treasury officials think this rate hike expectations trend will continue but assured the public that “we sit still comfortably with our cash position.”

“I think we have some leeway with respect to the bids submitted by our GSEDs (Government Securities Eligible Dealers) but at the end of the day we are consulting with them. We are talking to them quite regularly so that we would know what the feedback is from the market side,” he added.