91-day Treasury bills drop to 3.824%

MANILA, Philippines – The yield of the 91-day Treasury bills (T-bills) retreated slightly as investors swarmed yesterday’s auction of government securities.

The 91-day T-bills – used by banks in pricing their loans – fetched 3.824 percent or 3.5 basis points lower than the 3.849 percent average last Sept. 26. Tenders amounted to P4.47 billion and the auction committee made a full award of P1 billion.

The yield of the 182-day debt papers retreated by 0.7 basis point to 4.137 percent from 4.144 percent as bids for the P2 billion issuance reached P10.1 billion.

On the other hand, the average of the 364-day T-bills went up by 5.3 basis points to 4.458 percent from 4.406 percent last Sept. 26. Tenders reached P8.43 billion and the committee made a full award of P3.5 billion despite the slight uptick.

Finance Undersecretary Gil Beltran told reporters yesterday after the auction that the rates of the government securities moved sideways in line with the existing rates in the secondary market.

“The rates for the 91-day and the 182-day went down but the rate for the 364-day T-bills went up but the increase was so tiny so we accepted. The rates accepted were all within the secondary market rates,” he said.

Beltran pointed out that the committee was initially reluctant on making a full award for the one-year debt papers.

It contemplated on making a partial award wherein the rates would only inch up by 0.3 basis points to 4.409 percent and the committee would only accept P1.16 billion.

However, the committee decided to award the full P3.5 billion as the increase was well within the rates in the secondary market.

“It should not be construed as we allowed the rates for the 364-day T-bills to go up,” Beltran said.

According to him, the rates for government securities could go up between five basis points and 10 basis points without any reason at all.

“This is what you call market movement wherein we are just maintaining the stability of the financial market,” Beltran added.

Data showed that P20.3 billion worth of T-bills are scheduled to mature this week.

Beltran said the country’s budget deficit could range between P230 billion and P300 billion this year depending on the successful sale of big-ticket assets.

He explained that the Department of Finance (DOF) is hopeful that the government would be able to dispose the 103-hectare Food Terminal Inc. property in Taguig City worth P13 billion, its 40 percent PNOC- Exploration Corp. (PNOC) worth about P11 billion, and the lease of the Fujimi property in Japan worth about P3 billion.

“The sale of these three assets is very crucial,” he said.

The DOF official said the government is also looking forward to a favorable ruling from the Supreme Court so it could also dispose its shares in diversified conglomerate San Miguel Corp. (SMC) worth P50 billion.

“These assets are better left to the private sector,” he said.

The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s budget deficit swelling to a record P250 billion or 3.2 percent of gross domestic product (GDP) this year from P68.1 billion or 0.9 percent of GDP last year.

Philstar

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