Treasury rejects bids for 182, 364-day T-bills

MANILA, Philippines - The Bureau of the Treasury (BTr) sold P2 billion worth of Treasury bills (T-bills) yesterday, its first auction for the second quarter of the year.

Yesterday’s debt sale fell below the planned offer of P7.5 billion as investors submitted higher-than-expected bids. This prompted the auction committee to reject all bids for the 182 and 364-day T-bills.

The average rate of the 91-day T-bill rose to 2.494 percent, 11.1 basis points higher than the previous rate of 2.383 percent.

Total tenders for this paper reached P4.270 billion, more than double the P2 billion that was programmed.

On the other hand, the Treasury rejected all bids for 182-day and 364-day T-bills, which the committee considered unreasonably high.

The average rate of the 182-day T-bill would have risen to 3.122 percent from 2.45 percent while the rate of the 364-day paper would have risen to 3.286 percent from 2.808 percent previously had the committee decided to accept the tenders.

Total tenders for the 182-day T-bill reached only P1.4 billion, below the P2 billion allocation while tenders for the one-year paper reached only P3.25 billion, also below the offer of P3.5 billion.

Tan said there are uncertainties in the market.

“The market is quite uncertain of the near future and that’s the reason they are not bidding as aggressively as we want,” Tan told reporters after the auction.

He said inflation concerns are among the factors behind the market jitters.

According to the latest data from the National Statistics Office (NSO), inflation eased to 2.7 percent in February from four percent in January but rising oil prices in the global market remains a concern for investors.

Yesterday’s debt sale is part of the government’s plan to borrow P106.5 billion in the second quarter of the year.

Of the P106.5 billion, the government would issue P52.5 billion worth of T-bills and P54 billion worth of Treasury bonds from April to June.

The amount is lower than the first quarter borrowing program of P117 billion.

The government relies on local and foreign borrowing to fund its budget deficit, which is expected to hit P286 billion this year.

Last year, the budget gap hit P197.8 billion, lower than the original program of P300 billion set for 2011.