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T-bill rates plunge across the board; 91-day at 6.551% |
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The Manila Bulletin 04/26/2005
Yields of Treasury bills declined across the board for the second week in a row at an auction yesterday because of strong demand for the debt papers. The yield of the benchmark 91-day treasury bill fell 10.6 basis points to 6.551 percent from 6.657 percent in last week’s auction. Tenders for the P6 billion total offer for the three maturities, which was awarded in full, totalled P21.755 billion. Yields of other maturities were similarly lower. The 182-day T-bill fetched a yield of 7.727 percent, down 12.3 basis points; while the 364-day T-bill yield was down 11.4 basis points at 8.678 percent. Deputy National Treasurer Eduardo Mendiola said T-bill yields were pressured by recent favorable developments, including the narrower-than-expected budget deficit, the approval of higher power rates to stop the losses of state utility National Power Corp., and ample liquidity in the local financial system. "It was a sweet, short and easy auction," Mendiola told reporters. The government last week reported that the budget deficit in the first quarter was R63.46 billion, lower than the R77.8 billion ceiling for the period. Also late last week, Napocor obtained regulators’ approval to increase its power charges by an average of R1.0354 a kilowatt-hour, or 42 percent. This was slightly higher than a provisional rate rise of R0.98/kwh, or 40 percent, granted to Napocor in September. Mendiola said the improved investor confidence on peso-denominated assets is also being reflected in the currency market. Traders said expectations that the value-added tax bill, which is envisioned to drastically cut the government’s annual budget deficit, will be passed later this month also bolstered demand for government debt securities, pushing the yields lower. Both debt traders and the government expect the seven-year treasury bonds to fetch lower yields at yesterday’s auction. "We see the development today as a very good indicator of what will happen tomorrow," said Mendiola. (Dow Jones) |
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