Benchmark T-bill rate goes up to 7.718%

Rates for the benchmark 91-day Treasury bills (T-bills) went up to 7.718 percent at yesterday’s auction from the previous 7.438 percent as a result of rising uncertainties over interest rates, the US Fed’s rate hikes and the lingering fiscal problem, traders said.

Rates for the 364-day T-bills were also up at 9.975 percent from the previous auction’s 9.711 percent.

Because of high bid rates, the auction committee rejected all bids for the 182-day notes.

The Bureau of Treasury (BTr), announced yesterday that it was reviewing the performance of government securities eligible dealers (GSEDs) with the end view of revising its classification of primary and secondary dealers.

National Treasurer Mina Figueroa said yesterday the bureau would be releasing its revised list of primary and secondary dealers before the end of the year.

At present, Figueroa said GSEDs were accredited based on their capital adequacy ratio, corporate registration and compliance with all the relevant requirements of the Bangko Sentral ng Pilipinas (BSP).

"This time, we will include their performance in the auctions as part of the qualification for classification as a primary dealer," Figueroa said.

Figueroa said GSEDs have been showing erratic performance in the GS auctions and the BTr wanted to rationalize the list of some 40 GSEDs that have been participating in the auctions.

According to Figueroa, even the secondary market for government securities was no longer a relevant benchmark.

"Every time we say we will align our rates with the market, they play around with Mart 1 and they jack it up," Figueroa said. "So we don’t want to believe that anymore since there are no done deals there anyway."

Figueroa said the secondary market was "no longer real" and the participation of dealers in the primary market was not real either.

Under BTr rules, only primary GSEDs would be allowed to participate in the actual auction of government securities and those that have been reclassified into secondary dealers would be allowed to participate only in the non-competitive auction where they put in volume after the rates have been set.

Figueroa said the BTr was looking at the market participation of the GSEDs over the last 12 to 24 months. "Some of them haven’t awarded anything for as long as a year," Figueroa said.