Connect with us

Hi, what are you looking for?


T-bill bids rejected as market asks for higher rates

THE BUREAU of the Treasury (BTr) rejected all bids for its offer of Treasury bills (T-bills) as investors asked for higher yields as the US Federal Reserve chief said US rates could remain elevated for longer.

The BTr did not award any T-bills on Tuesday even as tenders reached P17.289 billion, higher than the BTr’s plan to raise P15 billion through the short-term papers.

Broken down, the Treasury turned down all bids for the 90-day T-bill even as total tenders reached P6.103 billion, above the P5-billion plan. Had the Treasury made a full award, the three-month debt papers would have fetched an average rate of 2.685%, surging by 61.5 basis points (bps) from the 2.07% seen last week.

The BTr also refused to award any 182-day securities even as total bids came in at P8.252 billion, higher than the programmed P5 billion. The average rate of the six-month T-bill would have gone up by 22.5 bps to 3.561% for a full award from 3.336% a week ago.

Lastly, the government turned down all tenders for the 364-day debt paper as demand stood at only P2.934 billion, below the P5-billion offer. Had the Treasury accepted these bids, the average yield on the one-year instrument would have jumped by 61.7 bps to 4.399% from the 3.782% fetched previously.

At the secondary market prior to the auction on Tuesday, the 90- 182- and 364-day T-bills were quoted at 2.145%, 3.252% and 3.809%, respectively, based on the PHP Bloomberg Valuation Reference Rates data provided by the BTr.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that the government made a full rejection as the market asked for higher returns after Fed Chair Jerome H. Powell said last week that the US central bank will continue hiking rates to bring inflation under control, even if the economy slows.

“The Auction Committee decided to reject all bids for the Treasury bills as rates increased and trended above secondary market levels across all tenors,” the Treasury said in a statement.

“Somehow, the BTr was expected to reject, especially as bids were higher following the Fed chief’s hawkish statement,” a bond trader said.

Mr. Powell said at the Fed’s annual economic symposium in Jackson Hole, Wyoming over the weekend that the US may see slower economic growth and an increase in unemployment as the central bank continues to raise rates to fight rising inflation.

He said the Fed will raise rates as high as needed and would keep them there “for some time” to bring down inflation, fueling bets of another 75-bp hike at the US central bank’s meeting next month.

The Fed has raised rates by 225 bps so far since March, including two 75-bp hikes in June and July.

Tuesday’s T-bill auction was the last one for the month. The government was only able to raise P57.021 billion via the short-term papers versus its P75-billion program for August due to several partial awards and Tuesday’s full rejection amid rising rates.

As for Treasury bonds (T-bonds), the BTr was able to raise P105 billion as planned from three auctions this month on robust demand for the higher-yielding long-term papers. The government was originally scheduled to hold four T-bond offerings in August, but it canceled its last auction to make way for its retail bond issuance.   

In total, the BTr was able to borrow P162.021 billion out of its P180-billion program for August.

For September, the Treasury plans to borrow P200 billion from the domestic market, or P60 billion via T-bills and P140 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at P1.65 trillion this year, equivalent to 7.6% of gross domestic product. — Keisha B. Ta-asan

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



PHILIPPINE STAR/ MICHAEL VARCAS WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global...


Buildings are seen along EDSA in Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded...


Heavy traffic is seen on the southbound lane of EDSA in Cubao, Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN THE PHILIPPINE auto industry’s...


REUTERS THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected...


Vendors arrange their goods at a public market in Manila. — PHILIPPINE STAR/ RUSSEL A. PALMA THE ASIAN Development Bank (ADB) is planning to...

Editor’s Pick

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.