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BTr rejects all bids for benchmark, 364-day T-bills |
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By Rocel C. Felix
The Philippine Star 01/24/2006 The Bureau of Treasury (BTr) rejected yesterday bids for the 91-day and 364-day Treasury bills (T-bills). "We don’t need the cash as much after a healthy fiscal performance and after having done most of our foreign borrowing, we’re in a strong position to take our time," National Treasurer Omar Cruz said. The government is in fact canceling two of the four-year Treasury bond sales scheduled for February. At the start of yesterday’s bidding, the 91-day T-bill, used by banks as borrowing benchmark, initially rose to 5.087 percent from a three-year low of 4.863 percent in last week’s auction, but the BTr rejected the tenders which totaled P2.225 billion. The BTr also rejected bids for the one-year T-bill. On the other hand, the yield on the 182-day T-bill fell to 6.312 percent from the previous week’s 6.314 percent. Of the total offers of P4.37 billion, the government sold only P750 million and rejected P3.62 billion. Cruz added that banks and other investors were not too keen on participating in yesterday’s auction because of the apparent confusion in the government’s recently launched debt consolidation program. Under the scheme, investors who currently hold Philippine government securities would be invited to exchange or swap them for new, liquid benchmarks issues with, three, five and seven-year maturities. These bonds will have a minimum size of P30 billion, P25 billion and P20 billion. Previously, Cruz expressed confidence that efforts to consolidate domestic debt by as much as P874 billion-worth of bonds issued in the local market will spur the lowering of interest rates further. "Some investors are confused about the bond exchange and we would have to conduct roadshows to better explain the features of the bond," Cruz said. He added that the cancellation of the February 2 and February 9 Treasury bond rates is part of the government’s reconfiguration of its auction program for the first quarter. "This is in tandem with the bond exchange program that we’re doing which is founded on our strong cash position," said Cruz. |
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