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Gov’t rejects T-bill bids |
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By Donnabelle L. Gatdula
The Philippine Star 08/31/2005 The Bureau of Treasury (BTr) rejected all offers for the benchmark 90-day Treasury bill (T-bill) during yesterday’s regular auction. National Treasurer Omar Cruz said this was a manifestation of a possible market confusion on the real borrowing path of the National Government (NG). "The market is totally lost. There is confusion (in the market). I don’t want negative carry over," Omar said, defending the BTr’s decision to reject all 90-day T-bill bids. "There is a ridiculous relationship between competitive and uncompetitive bids." A total of P1.49 billion worth of bids for the 90-day T-bill were submitted for the offered P2-billion 90-day notes but the NG rejected all offers. As a result, the benchmark rate stayed at 5.662 percent. The rate for the 182-day T-bills, on the other hand, increased to 7.597 percent from last week’s 7.592 percent. The 364-day tenor likewise rose to 8.695 percent from 8.637 percent. Cruz underscored the need to clear up the confusion brought about by the NG’s decision to issue retail Treasury bills (RTBs) today (Aug.31). The RTB issuance was originally scheduled Monday (Aug. 30) but was moved because of the public holiday declared by Malacañang over the weekend. "I think the market was a little bit confused about supply. They were concerned about the issue of RTBs," Cruz said. The BTr’s top official stressed that despite the issuance of the RTBs, the government will pursue its borrowing program, 60 percent of which will come from foreign sources while the remaining 40 percent sourced in the domestic market. Based on the financing program, he said they would be borrowing some P40 billion a month or about P272 billion this year in the domestic market. About $4 billion, he said, would be raised outside the country. It has already raised bulk of this foreign borrowing in the early part of the year and would need only $850 million more. He said, they would be issuing five-year RTBs worth P10 billion in the regular auction to the government securities eligible dealers (GSEDs) and another P30 billion through small investors by the end of the week. There were concerns in the market that the government will no longer push through with the issuance of international bonds because of its local borrowing spree. A bank analyst said NG may forego some of its regular Treasury bond issuances due to the RTB flotation. But Cruz stressed that there is so much liquidity even over-the-counter. "I hope they get the supply equation right about the RTB issuance." |
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