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 PRESSROOM / NEWS
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 | Republic of the Philippines
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Pablo Ocampo, Sr. Street
Manila 1004
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November 9, 2009
T-BILL RATES: NOVEMBER 09, 2009
BTr
FPPO-JEP
Yields from the short-term Treasury bills were little changed across the board today mainly due to the absence of fresh leads from the domestic front. Today’s tight trading was expected as data crucial to the movement of interest rates were already released last week. Since all figures were already out such as the inflation data and the decision of the BSP’s Monetary Board on its key rates, these were already priced in by the bond market coming in at today’s auction thus, there was not much movement. Last week, the government reported that in October, domestic inflation rose to 1.6 percent, slightly higher than September’s 0.7 percent due to higher food prices caused by the recent calamities. But despite the slight uptick in inflation, this has failed to spark off a rate hike. The Monetary Board of the BSP last Thursday kept its key interest rates unchanged at 4 percent and 6 percent for its overnight borrowing and lending rates, respectively. Appetite of the market players for Philippine debts was also partly driven by the disappointing US unemployment data released last Friday which rose to 10.2 percent in October.
On the other hand, it was notable that market players showed strong demand today for these government securities. In fact, they swamped today’s auction as total tenders was almost four times oversubscribed than the offering. Apparently, the bond market is still infused with substantial liquidity and since market players are in search of investment outlets with better yields, they flocked back to government securities just as what happened at today’s auction.
The BTr auctioned off P6.5 billion worth of Treasury bills today, with appetite mainly leaning towards the six-month debt paper. It awarded as planned as total tenders reached P23 billion. The benchmark 91-day T-bill fetched 2.5 basis points lower to average at 3.824 percent from the 3.849 percent rate awarded last October 26 auction. Following the same trend, the six-month T-bill yielded 0.7 basis point lower to 4.137 percent than the previous rate of 4.144 percent. Meanwhile, the Auction Committee allowed the rate of the one-year T-bill to jump a bit at 4.459 percent or 5.3 basis points higher than the 4.406 percent rate last October 26.
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