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TREASURY
bill rates moved down across the board on Monday, in
concert with expectations and actual market conditions
where secondary market rates traded lower than previous.
Because
of this, Deputy Treasurer Ed Mendiola sold only P4.46
billion of the P6 billion he originally intended to
sell, not quite content with what the market threw at
him.
T-bill
rates were seen to move down following the decision of
the Bangko Sentral ng Pilipinas (BSP) to cut its policy
rates by 25 basis points, allowing for cheaper credit
and potentially higher local output down the line.
Mendiola
said the market tested the government’s resolve to
obtain funding at least cost to taxpayers over the next
12 months.
He told
reporters the market waited for confirmation from the
Bureau of Treasury that they will similarly go with the
direction of the BSP.
That the
market hoped for the rates to go the opposite direction
is testament to the folly that government needed money
and was willing to pay more for it, according to the
Department of Finance.
Mendiola
saw the 91-day benchmark used in pricing domestic loans
move down by only 0.01 basis point to 3.758 percent from
3.759 percent two weeks earlier. He sold only P800
million instead of the P1.5 billion he
originally hoped for. The rate for the intermediate
182-day T-bills moved down also by 2 basis points to
4.812 percent but sold all P2 billion as planned.
One-year
T-bills moved down by 1.5 basis points and Mendiola sold
only P2.235 billion of the P2.5 billion he wanted at the
start of the auction.
The
banks previously welcomed the easing of rates, as the
cheaper cost of funds was seen to push consumption
levels higher— translating later to higher growth
overall.
It will
also be comparably cheaper for businesses, particularly
the small and medium scale enterprises, to undergo
expansion programs and put in more capital as the cost
of money comes down. |
