T-bill results mixed

MANILA, Philippines – The Bureau of the Treasury (BTr)awarded in full the P6 billion in 91-day Treasury bills (T-bills) offered. The shortest-dated T-bills fetched an average rate of 1.998 percent, higher than the 1.78 percent recorded in the previous auction. Tenders for the P6 billion offering amounted to P8.86 billion.

Rates for the six-month T-bills stood at 2.252 percent, after the BTr capped the rate at 2.35 percent. This was higher than the previous rate of 2.037 percent.

The one year T-bills fetched an average rate of 2.571 percent, higher than the previous auction result of 2.276 percent.

National Treasurer Roberto Tan said T-bill trading was “quite thin.” “We were expecting this at least on the 364-day (offering), the lower volume,” he said.

Tan said jitters ahead of the US Federal Reserve meeting tomorrow could have contributed to the behavior.

Bond traders, meanwhile, said the market is demanding higher rates amid supply risks, as well as domestic factors.

“We continue to see that players still have the peso liquidity except that their asking for higher rates,” they said.

“The higher rates we’re seeing on the short dates continues to reflect supply risk. Since the BTr changed the frequency and the volumes of their auctions, that is causing players to make adjustments on their prices,” they said.

“This is on top of concerns regarding market developments and uncertainties. On-shore, we’re looking at higher domestic inflation.”