 |
 |
|
|
       |
Government rejects all bids for benchmark T-bills anew |
|
By Des Ferriols
The Philippine Star 01/31/2006 The Philippines rejected yesterday all bids for 91-day Treasury bills (T-bills), whose yields banks use as a benchmark for loan rates. It was the third rejection this month. The yield on the 91-day T-bill would have risen to 5.318 percent if the government sold all P1 billion it offered. Banks and other investors submitted bids totaling P1.821 billion. The government also rejected all bids for the 91-day securities last week to keep the yield from rising faster than it expected. The 182-day yield fell to 6.268 percent from 6.312 percent on Jan. 23. The 364-day yield was unchanged at 7.289 percent from the previous sale on Jan. 16. The government likewise rejected all bids for the 364-day bills at last week’s auction. Banks and other investors submitted bids totaling P14.464 billion. The government sold P2.26 billion out of the P3.5 billion of debt securities on offer. According to National Treasurer Omar Cruz, the volume indicated that there was really no market to support such a surge in the interest rate. "If they are trading at these levels in the secondary market, then maybe I could have considered allowing the rates to go up," Cruz said. "But they’re not trading so there really is no movement on short-end instruments." Cruz said banks are looking more at longer-term instruments rather than short-end notes and since there was no volume to support the bids made yesterday, the auction committee decided to reject them all. But Cruz expressed doubt that yesterday’s bids for the benchmark notes indicated that the interest rates have finally bottomed out after retracing record lows that were last seen as far back as 2002. "If there is no trading, then that tells me there is really no market," Cruz pointed out. "If that is not the market talking, then we can reject since we can afford to do so. It’s not about cash management this time, we have enough to last us to the end of the year." The BTr has already canceled its scheduled treasury bond auction today for five and seven-year bonds. "If anything, I want to thank the market for giving me a chance to save on my carrying cost," Cruz said. Some analysts said banks are moving ahead of the anticipated increase in US policy rates when the Federal Open Market Committee meets today but Cruz said it was unlikely that inflation jitters figured in yesterday’s bids. "It is not automatic that if the US tweaks its interest rates, so would the Bangko Sentral ng Pilipinas (BSP)," he said. "I think the market knows that by now." T-bill rates plummeted below the five percent mark early this month as expectations ran high amid a projected decline in the Arroyo administration’s borrowing requirement for 2006. |
 |
Circular Letters/Memoranda |
|
Speeches/ Presentations |
|
Photo Gallery |
|
The 2008 RBAP Charter Symposium |
|
2008 CFI Awards |
|
Rural Banking Week Celebration Golf Tournament |
|
Client Satisfaction Survey for Licensing Management System of the Supervision and Examination Sector |
|
Financial Reporting Package 2008 |
|
BSP releases regulations on liquidity, market risk weighting |
