Mon07282014

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Yield of T-bills dropped on all tenors

YIELD of the benchmark 91-day Treasury Bills dropped below one percent during Monday’s auction while the other tenors also decreased by at least a quarter of a percentage point as a result of a strong demand from investors.

The rate of the 91-day T-bills, the benchmark of banks when pricing their loans, went down below one percent to .745 percent, a decline of 50.4 basis points from the previous yield of 1.249 percent.

Tenders reached P7.81 billion, or nearly eight times than the P1 billion offer of the BTr. The government made a full award.

This is the first time this year that the rate of the benchmark T-bills went below one percent; the last was in November.

The lowest recorded average for the 91-day T-bills, on the other hand, was at 0.438 percent on Sept. 5 last year.

The said paper is being traded at the secondary market at 1.25 percent.

National Treasurer Roberto Tan told reporters that the rate went down as a result of the market’s reaction to the decision of the US Federal Reserve to start a third round of bond buying or quantitative easing.

“There’s some news that came out on the decision of the US Fed on quantitative easing, and there are some views that there may be some action on the part of the local authorities on this,” he said.

Meanwhile, rate of the 182-day T-bills fell to 1.445 percent, some 26.8 basis points lower than the previous rate 1.713 percent.

Tenders for the paper amounted to P8.19 billion, and the auction committee made a full award of P2.5 billion.

The said paper is being traded at the secondary market at 1.625 percent.

Yield of the 364-day paper also fell to 1.906 percent, down by 31.4 basis points from the previous average of 2.22 percent. The one-year paper is being traded at the secondary market at 2.175 percent.

Tenders reached P7.86 billion or less than twice the government’s offer of P4 billion. The auction committee made a full award.

The government sold P4 billion worth of one-year paper, with tenders amounting to P7.86 billion, nearly twice the government’s program for the said paper.

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