T-bill rates move up for all tenors

Treasury bill (T-bill) rates rose across the board on full awards for 91-day and 364-day tenors, the Bureau of Treasury (BTr) reported yesterday.

National Treasurer Sergio Edeza said the rate increases were expected as the government wanted to align T-bill rates, particularly the bellwether 91-day rate, with the Bangko Sentral ng Pilipinas’ (BSP) key overnight borrowing rate of 6.750 percent.

The bellwether 91-day rate averaged 5.629 percent, compared with 5.506 percent previously, with bids ranging from 5.5 percent to 5.875 percent.

The government awarded its P4-billion offer against total tenders of P4.412 billion.

Edeza said the government has decided to hold an auction for T-bills and two auctions for T-bonds in December, instead of an earlier plan to scrap all auctions scheduled for that month.

The government is holding T-bill auctions on a fortnightly basis, with a P9.50-billion offer at each auction. T-bond auctions are held every week.

"We want to build up our cash position. It’s better to be prepared for future rejections," he told reporters after the auction.

He said the 91-day rate, used by banks in pricing loans, could rise to as high as seven percent in the coming months, reflecting uncertainties in the run-up to the May elections.

"These increases are expected," Edeza said. "It’s something that the market has been pushing for. They’re looking for a balance between BSP rates and the secondary market rates," Edeza said.

Rates for the 182-day T-bills averaged at 6.763 percent versus 6.567 percent previously with bids ranging from 6.6 percent to seven percent.

The government auction committee tempered the rise in the average 182-day rate by resorting to a partial award.

The government awarded P2.153-billion worth of six-month bills against its offer of P3 billion and total tenders of P2.753-billion.

The government awarded in full its offer of P2.5-billion worth of 364-day bills, with the rate averaging 7.366 percent, compared with 7.236 percent previously with bids ranging from 7.250 percent to 7.625 percent. Tenders totaled P5.720 billion.