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Benchmark interest rate continues decline |
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By Francis Emmanuel C. Respicio, Researcher
The Manila Times, Tuesday, February 15, 2005 TREASURY bill (T-bill) rates have gone down across the board for the fourth time this year. On Monday’s auction the Bureau of Treasury said excess liquidity in the market and the removal of the country from the antimoney laundering Financial Action Task Force’s (FATF) blacklist helped pull down rates. The benchmark 91-day T-bill rate, which banks use in pricing their loans, declined to 6.71 percent, or 13.7 basis points, lower than the 6.847-percent rate charted during the previous auction on January 31. The yield on 182-day T-bills also went down to 7.603 percent, or 24.2 basis points, lower than the 7.845 percent posted in the last auction. Last year’s lowest 182-day rate was posted at 7.441 percent on March 15, 2004. Meanwhile, the yield on the 364-day T-bills declined to 8.591 percent, or 19.7 basis points, lower than the 8.788-percent registered previously. Deputy Treasurer Eduardo Mendiola said news of the FATF delisting helped, adding more pesos are running after government securities. Paris-based FATF recently struck off the Philippines from a list of dirty-money havens. Bids for the three-month debt paper rose to a year-high of P12.406 billion from P12.105 last auction. Monday’s bids also surpassed last year’s highest bid of P9.81 billion posted on August 2, 2004. Market interest for the six-month debt, however, went down to P9.665 billion from P11.545 billion previously. Investors’ interest in the one-year paper also declined to P9.41 billion from P16.29 billion. Total government borrowings remained at P12 billion; banks made bids worth P31.481 billion, or P8.459 billion lower than the previous auction’s P39.94 billion. Mendiola said the Treasury expects stable rates in the near future. Although it would be alright for interest rates to continue going down, he cautioned against a precipitous drop as it would be unhealthy for the market to have fluctuating rates. Mendiola also ascribed the continuous drop in T-bill rates to good leadership at the bureau. He made this statement in light of National Treasurer Norma Lasala’s reported replacement by one-time banker Omar Cruz, after Cesar Purisima steps in as the new finance secretary. Purisima will take control of the finance department from Juanita Amatong on Tuesday. |
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