THE government partially awarded the Treasury bills (T-bills) it auctioned off on Monday after the papers received tepid attention with P11.9 billion, from the P15 billion on offer, as investors awaited signals from monetary authorities.
National Treasurer Rosalia V. de Leon told reporters despite the high rates received in the latest auctioned papers, the preference of investors still remains on the shorter-end of the curve.
“The appetite of the market is still on the short end,” de Leon said. “And I think also for tomorrow, they are going to wait for our announcement of our borrowing program for the third quarter.”
The 91-day tenor was awarded a partial P3.585 billion, from the P5 billion on offer with bids reaching P6.718 billion. The average annual rate for the tenor settled at 3.484 percent, which is 16.1 basis points higher than the previous rate of 3.323 percent.
The Bureau of the Treasury (BTr) also pointed out that market investors are still on a wait and see stance regarding possible rate hikes from the the Bangko Sentral ng Pilipinas (BSP), which prompted the high rates offered during auctions for government securities.
“Even after the 50-basis points hike of the BSP, there are a lot of analysts saying that it’s not enough, so more rate hikes is already being inputted by the market that supposedly should have already been priced in,” de Leon said. “But then again they expect there will be more price hikes so they are already cushioning themselves against the yields also.”
Over May and June this year, the Monetary Board has raised interest rates by a total of 50 basis points, bringing the BSP’s overnight borrowing, lending and deposit rates at 3.5 percent, 4.0 percent and 3.0 percent, respectively.
Bids for the 182-day tenor reached P5.685 billion with the auction committee awarding P2.464 billion, from the P4 billion on offer. The average annual rate settled at 3.873 percent, 10.7 basis points higher than the previous auction rate of 3.766 percent.
The 364-day tenor saw bids amounting to P7.851 billion with the BTr partially awarding P5.851 billion, from the P6 billion on offer. The average annual rate for the T-bill was set at 4.429 percent higher by 7.2 basis points, from the 4.357 percent rate set in the previous auction.
“So they [investors] are also on a wait-and-see [stance] given already what they saw in terms of the inflation outlook at the same time also they are looking at the [performance of the] peso,” de Leon said. “Even after the 25 basis point [hike in interest rates] they are really predicting that there will have to be more policy actions to be taken by the BSP.”