Government partially awards T-bills after rates went up
MANILA, Feb. 22 (PNA) -– The government made partial awards on all the tenors of its Treasury bills (T-bills) after rate of the debt paper rose across the board Monday, which officials said is not questionable as these are only aligning to secondary market.
Rate of the benchmark 91-day bill, which banks use for the pricing of their loan, was up 17.9 basis points to 1.947 percent from the previous auction’s 1.768 percent. Highest rate during the auction reached two percent while lowest was at 1.875 percent.
Had the auction committee made a full award, average rate of this paper rose by 23.7 basis points to 2.005 percent. Total bids for this tenor amounted to P4.77 billion.
The Bureau of the Treasury (BTr) offered the debt paper for P2.5 billion but made a partial award of P1.7 billion due to the jump in rates.
The six-month paper averaged at 2.408 percent, higher by 17.3 basis point against the 2.235 percent it fetched two weeks ago. Highest rate for the day reached 2.55 percent while lowest was at 2.3 percent.
Had the auction committee awarded this as offered, its average rate would have risen to 2.446 percent or 21.1 basis points higher than its rate last February 6.
It was offered for P3 billion but the auction committee awarded only P2.531 billion. Bids for this tenor amounted to P4.781 billion.
Also, the one-year bill’s average rate went up by 30.4 basis points to 2.709 percent from 2.405 percent in the previous auction. Highest rate was at 2.75 percent while lowest was at 2.5 percent.
Total tenders reached P5.05 billion, higher than the P3.5 billion offering, but the auction committee accepted P2.6 billion.
Finance Undersecretary Gil Beltran, who is a member of the auction committee, said the rise in T-bills’ rates is in line with those with the secondary market. He said it is also affected by movements of rates in other countries.
“Actually we could have accepted less but it would not be fair to the investors because that’s the rate in the secondary market. It just wants to align,” he said.
Beltran also attributed the low demand for the debt paper to the scheduled price setting auction of at least P40 billion worth of retail treasury bond (RTB) Tuesday.
“(The investors) are also looking forward to that one,” he added. (PNA)
DCT/JS