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Government rejects all bid applications for Treasury bills |
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By Donnabelle L. Gatdula
The Philippine Star 09/20/2005 The government rejected yesterday all bids for its benchmark Treasury bills (T-bills) for the third time in the last four weekly auctions. The yield on the 91-day T-bill, which banks use as a benchmark for loan rates, would have risen to 6.311 percent should the government have accepted all bids from banks and other investors. That would have been the highest yield since April. Investors submitted bids totaling P1.31 billion. The government planned to sell P2 billion. The government also rejected all bids for its 182-day and 364-day T-bills. It offers P2 billion each of the securities every week. "The Treasury is awash with cash and we can’t afford to wait for the market to clear itself up," National Treasurer Omar Cruz said. The Bureau of Treasury (BTr) can not accept the offers made by the market dealers. "There was no trade in the market. I think the market is confused again," he said. "With my surplus, I can reject their offers." According to Cruz, the 91-day T-bill was obviously undersubscribed and the six and nine-months bills were also off the secondary trade. Cruz also said they decided to reject all the offers to avoid confusion in the market. "If I accept partially, then they (market) will be more confused," he added. "We want to be consistent with our moves. We want to send a signal to both local and international markets that we have money," he said, explaining BTr’s full rejection. Analysts said the market is waiting for the results of two major moves in the international and local financial systems. They said decision of the US Federal Reserve if it will raise its rates would be very crucial. The market, they said, is also waiting the decision of the Bangko Sentral ng Pilipinas (BSP) if it would raise its policy rates or the reserve requirement ceiling this week. |
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