T-bill yields up across-the-board

MANILA, Philippines - Interest rates on Treasury bills climbed across-the-board as bids declined at the government’s auction yesterday.

The Bureau of Treasury awarded only P11.845 billion or about 59 percent of its offer of P20 billion.

The yield on the benchmark 91-day T-bill went up to .217 percent from only .04 percent.

The 182-day bill fetched .398 percent or 18.2 basis points higher than the previous .216 percent.

The interest rate on the 364-day debt paper rose 29.5 basis points to .602 percent from .307 percent.

The bellwether issue was oversubscribed as investors tendered a total of P5.16 billion. The BTR awarded P4 billion, the size of its offer.

Bids for the 182-day T-bill reached P6.01 billion but the government only accepted P4.75 billion.

For the 364-day bills, buyers tendered P4.465 or less than half of the total offer of P10 billion. Of this amount, only P3.095 billion was accepted.

Deputy Treasurer Eduardo S. Mendiola said the rise in the yields was within the range of deals at the secondary market.

Mendiola also attributed the low demand to the absence of foreign funds and preference by some investors to park their money in special deposit accounts.

 He said the impact of the country’s achievement of a second investment grade rating, this time from Standard & Poor’s, could not yet be felt as it takes time for fund managers to reconfigure their portfolio.

 S&P raised its rating on the Philippines’ long-term foreign-currency-denominated debt was raised one level to BBB- from BB+, with a stable outlook.

 Higher ratings are seen to boost capital inflows into the country and force the Bangko Sentral ng Pilipinas to implement further measures to curb asset-bubble risks.

 Last month, the Central Bank cut the rate it pays on SDAs for the third time this year while keeping the rate it pays lenders for overnight deposits at a record low 3.5 percent.