AN aggressive market pushed the rates for the three- and six-month Treasury bills (T-bills) higher at the auction on Monday but, at the same time, sent the one-year T-bill rate sharply lower.
The mixed auction results highlight the impact of an ongoing effort by the Bangko Sentral ng Pilipinas to bring market interest rates closer to its policy rates with the adoption of a so-called interest-rate corridor (IRC) the adoption of which has only recently been done.
According to the Bureau of Treasury (BTr), the 91-day tenor posted a 7.5-basis-point increment to 1.58 percent at the auction on Monday, significantly up from when it was last sold to eligible government securities dealers when it averaged only 1.505 percent.
The three-month tenor attracted tenders totaling P17.586 billion, or more than twice the number the auction committee intended to sell.
The 182-day T-bills also moved significantly higher to 1.617 percent at the Monday auction, from only 1.526 percent when it was last sold by the BTr.
The six-month tenor also attracted bids more than twice the intended volume sought by the BTr when it awarded all P6 billion worth to financial institutions.
But the one-year tenor posted the sharpest drop of 24.6 basis points at the auction on Monday, when its rate moved back to only 1.675 percent, from 1.921 percent at the last T-bills sale.
The mixed auction results allowed the BTr to award all P20 billion worth of T-bills in full on Monday.
“The bids have been quite aggressive, comparatively. I think there are some trading hesitancy last week because of the anticipated auction by the Bangko Sentral and its interdeposit facility, which went well. But after that, the confidence of investors have regained and this is reflected in the auction today,” said Roberto B. Tan, national treasurer.