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THE
one-year Treasury-bill rate dropped by 6.9 basis points
to 6.846 percent, the Bureau of Treasury reported on
Monday.
This is
the second time the rate for 364-day bills fell.
A bank
executive belittled the yield slide, saying it is within
trading range and, at this point, does not reflect a
reverse in the general uptrend forecast for near-term
interest in rates.
What was
significant in Monday’s auction was that Finance
Undersecretary Roberto Tan sold only P1.62 billion worth
of 364-day bills, said Pascual Garcia III, president of
Philippine Savings Bank. Up for sale is the regular
weekly volume of P6 billion.
“This is
just within a trading range. The market will continue to
focus on inflation and the currency depreciation may
push the Bangko Sentral ng Pilipinas [BSP] to consider
[an interest] rate hike,” Garcia said in a text message.
Increases in food and nonfood prices and second-round
inflationary threats like the current round of wage
hikes have pushed the year-to-date inflation past the
ceiling to 6.2 percent in the first four months.
These
developments could force the BSP to abandon growth
considerations and focus more on price movements that
some banks have interpreted as a signal for an
interest-rate hike as early as June or later in the
second half.
Bankers
said the government has to let domestic interest rates
move up if it wants to generate a volume of credit that
is in keeping with its funding requirements.
But Tan,
also the acting Treasury chief, wasn’t through with the
banks just yet, and said Monday the plan to review the
performance of the 30-member government securities
dealers and rationalize their ranks.
Tan said
the review was prompted by observations that only around
10 members regularly join the weekly auction.
The
situation, Tan said, raises questions on the intent of
banks and financial institutions that make up the market
of accredited government securities dealers, also known
as GSEDs.
“But we
would want to listen to them first,” he added.
The
review could lead to endorsements by the review panel on
the temporary or even permanent exclusion of some
dealers in subsequent auctions.
“The
have to convince us they are serious in their role as
GSEDs by participating more actively than they have in
the past. Some of them clearly are not contributing for
the development of the market,” Tan said.
A lack
of participation by dealers has been noted during the
time of former Treasury chief and Citibank executive
Omar Cruz, who now works for the American Insurance
Group.
Tan said
this approach to responsibility needs stop. |
