MANILA -- Bureau of the Treasury’s auction committee on Monday rejected bids for the 91 and 364-day Treasury bills (T-bills) but partially awarded the 182-day paper after banks demanded overly high yields.
Had the auction committee awarded the bellwether 91-day T-bill, its rate would have risen to 5.776 percent from 5.733 percent during the auction last February 18.
Also, average rate of the 364-day paper would have risen to 6.114 percent from 6.052 percent last February 18.
On the other hand, rate of the 182-day paper declined to 5.975 percent from 5.978 percent in the previous auction.
All the tenors were oversubscribed.
The 91-day paper was offered for PHP6 billion but bids reached PHP 8.893 billion. Tenders for the one-year paper amounted to PHP11.340 billion, higher than the PHP8 billion offer.
Bids for the 182-day paper reached PHP11.569 billion, higher than the PHP6 billion offer. The auction committee awarded PHP3.939 billion.
National Treasurer Rosalia De Leon attributed investors' demand for high yields to expectations of further deceleration in the domestic inflation rate.
Last January, inflation declined to 4.4 percent from the previous month’s 5.1 percent. Last year, rate of price increases peaked at 6.7 percent in September-October.
De Leon said that since inflation is projected to decline even more “there is really no room for rates to be going up.”
Another factor leading to the rejection of the 91-day and 364-day T-bill tenders was the strong demand for the retail treasury bond (RTB), which the BTr is offering from February 26 until March 8, 2019.
De Leon said that since offering the RTB last Tuesday, the BTr has received about PHP170 billion worth of orders as of Thursday last week.
“There’s really reasons for us to reject the 91 and 364- and partially accept the 182,” she added. (PNA)
