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THE
banks tried to defy financial gravity on Monday and
sought higher premium for short-term placements no
further than one year forward—to no avail.
The
Bureau of Treasury rejected their bid to push the rates
upward as logic dictates the rates should fall as a
result of Friday’s 25-basis-point rate cut introduced by
the Bangko Sentral ng Pilipinas (BSP).
Treasury
officer in charge Roberto Tan thwarted the concerted
attempt by selectively accepting only those bids that
were reasonable and in keeping with the downward path of
domestic interest rates.
“Our
market soundings indicated [for the rates to fall], so
we rejected the higher bids,” Tan told reporters.
Analysts
on Friday anticipated this week’s auction of Treasury
bills to fall following the 25-basis-point cut at which
the BSP borrows from or lends to banks on short-term
basis to 5.5 percent and 7.5 percent, respectively.
“We
expected the rates to move sideways at most,” Tan said
of the banks’ Monday caper when they tried to push it up
as high as 17 basis points in the case of one-year
T-bills.
But
instead of selling P6 billion, Tan eventually sold only
P3.29 billion as he awarded bids that fitted within a
given range.
Tan
wondered aloud why the banks would try to bid up the
rates at a time when even the BSP was relaxing its grip
on monetary policy and encouraging businesses and people
to expand and build more.
He might
have forgotten monetary board member Romulo Neri and his
remarks about the banks’ inherent laziness by lending
money to government instead of earning their keep by
taking the risk and lending them instead to the private
sector.
Most
banks generate handsome profits from fee-based income,
now no longer as lucrative, as domestic interest rates
continue to soften even as government gains strength
with each month.
As a
result, the 91-day benchmark fell by 2.8 basis points to
3.672 percent and 182-day T-bills by another 1.5 basis
points to 4.692 percent.
One-year
T-bills posted a 6.1-basis-point reduction to 5.567
percent.
Finance
Undersecretary Gil Beltran said Tan can afford to
selectively award bids and sell only a portion of the P6
billion they sought on Monday because the national
government continues to enjoy a healthy cash position
equal to more or less three months of anticipated
requirements. |
