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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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June 15, 2010
T-BILL RATES: JUNE 15, 2010
BTr
FPPO-JEP
The National Government sold P6.5 billion worth of Treasury bills in an auction today, lower than the programmed sale of P8.0 billion. This was after the Auction Committee decided to accept all the subscriptions for the 91- and 182-day and limited the sale of its one-year debt as market players attempted to push up the rate higher than the prevailing market rate. The Treasury, however, allowed the yields to inch up across the board but only with an increase of not more than 7 basis points as demand continued to remain robust. Although the government is shouldering slightly higher interest rates this time, the approved yields were at levels aligned with the movement of interest rates in the secondary market. Despite the relatively high bids thrown by the market players, the sizeable amount of tenders today showed good demand still for these debts and also proved that the system was still awash with liquidity.
The relatively high bids thrown by market players today were somewhat due to the absence of fresh leads this week from the domestic front. Data crucial to the movement of interest rates were already released last week thus it seemed that market players were testing if the government would accept high bids today. Since all the important 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. Inflation for the month of May eased to 4.3 percent from 4.4 percent last April while the central bank on its last policy meeting, kept the overnight borrowing rate at 4.0 percent and the overnight lending rate at 6.0 percent. The deficit data for May, on the other hand, which has been a major driver of interest rates, is yet to be released by the government. The budget deficit in the first four months of 2010 reached 131.6 billion, slowly closing in to the P145.2 billion target for the first half of the year.
At today’s auction, the BTr sold P6.5 billion worth of Treasury bills, with appetite mainly leaning towards the six-month debt paper. The benchmark 91-day T-bill fetched an average rate of 3.919 percent, 5.3 basis points higher than the 3.866 percent awarded during the May17 auction. Bids ranged from 3.890 percent to as high as 3.962 percent. The government accepted the bids as planned worth P1.5 billion as tenders reached P3.760 billion, more than twice oversubscribed. The six-month T-bill, on the other hand, yielded 4.129 percent or 1.8 basis points higher than the previous rate of 4.111 percent during the May 31 auction. The auction committee awarded P3 billion as planned as total subscriptions reached P7.56 billion, more than twice oversubscribed. Bids ranged from 4.1 percent to 4.135 percent. The rate of the one-year paper also moved up when it fetched at 4.566 percent, 7.4 basis points higher than the previous rate of 4.492 percent. Tenders reached P6.0 billion, oversubscribed than the P3.5 billion offering. To prevent the government from shouldering a rate higher than the secondary market, the Auction Committee only sold P2.0 billion worth of this debt paper out of the P3.5 billion planned offering. Had the Auction Committee made a full award, the rate would have gone up by 11.6 basis points at 4.608 percent, higher than the 4.5 percent secondary market rate. Bids for this paper ranged from 4.5 percent to 4.6 percent.
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