Yt Framework

The government rejected for the second time in a row bids for the benchmark 91-day Treasury bill (T-bill) after banks asked for higher yields.

Had the auction committee accepted the bids, the debt paper, which banks use for the pricing of their loans, would have gone up by 67.7 basis points to 2.851 percent from 2.174 percent it fetched last April 30.

Total tenders for this paper reached P2 billion, the same amount as the offer of Bureau of the Treasury (BTr).

National Treasurer Roberto Tan said bids for this tenor were unreasonable, thus, the auction committee rejected the bids.

“They want an uptick in rates but the way they bid they already know that we will be rejecting it. The volume is quite subdued in terms of interest,” he said.

Meanwhile, the auction committee made full award for the 182-day and 364-day bills that were offered for P2 billion and P3.5 billion, respectively.

Rate of the six-month paper averaged at 2.30 percent, slightly higher than the 2.258 percent it fetched on April 30, 2012. Bids for this tenor totaled to P3.33 billion.

Relatively, average rate of the one-year security rose to 2.5 percent from 2.518 percent two weeks ago. Bids for this debt instrument amounted to P5.05 billion.

By Joann Santiago-PNA