The Bureau of the Treasury (BTr) reported mixed results in its latest auction of Treasury bills (T-bills) on Tuesday, with the auction committee selling only P5 billion of the P15 billion on offer due to high bid rates from the market.
National Treasurer Rosalia V. de Leon said bids for the 182- and 364-day tenors leaned on the higher end of the curve, which forced the auction committee to reject all bids for both tenors.
The committee would award only the 91-day IOUs.
“Otherwise, the rates would have been as much as 30 basis points” higher, de Leon said.
The auction committee awarded the full P5 billion for the 91-day tenor, with bids reaching P8.901 billion and the committee rejecting P3.901 billion. The three-month IOUs averaged 3.346 percent on Tuesday, which was 15.5 basis points higher than the previous rate of 3.191 percent.
Bids for the 182-day tenor were undersubscribed, reaching only P3.130 billion of the P4-billion on offer. Had the auction committee sold the IOUs, the rate would have averaged 3.683 percent, or 47.7 basis points higher than the previous auction’s 3.206 percent.
For the 364-day tenor, bids totaled only P2.940 billion on offers reaching P6 billion. The one-year T-bill rate would have averaged 3.870 percent, or 43.6 basis points higher than the previous rate of 3.434 percent.
“We are not comfortable with the higher rates they are offering. We can still afford to reject at these levels given the cash cushion of the Treasury. We still can afford to not award at those levels,” she added.
De Leon said the market may have taken into consideration the country’s inflation path and expectations from the Federal Reserve System (the Fed) on possible rate hikes.
“I think it’s really where we are in terms of the inflation, that they still see the uptrend, the uncertainty, [the anticipated] rate hikes from the Fed,” she added.
Earlier, the Philippine Statistics Authority said the inflation in March averaged 4.3 percent or higher than the Bangko Sentral ng Pilipinas’s target range of 2 percent to 4 percent.