THE Bureau of the Treasury made a partial award of the benchmark Treasury bills on Monday as investors were jittery on the possible movement of the key policy rates by the central bank later this week.

The government only raised P4.73 billion, instead of the P9-billion program for the auction.

The benchmark 91-day T-bills fetched a rate of 2.888 percent, or 62.4 basis points higher, when the said tenor was last auctioned off this month.

The auction committee had to adjust the rate four times to get the said yield. The government, however, made a partial award of P735 million, or less than half of the P1.5 billion intended award for the tenor.  

At the secondary market, the done deal for the three-month paper was at 3.125, or higher by 3.1 basis points than that at the government rate.

The committee, meanwhile, rejected the entire bids for the six-month paper after it was undersubscribed, or the bids did not reach the offer of the government of P3.5 billion. The bids for the said tenor only reached P3.31 billion.

“Bidders were very uncertain on 182-day paper; there were mixed sentiments. There is uncertainty as to what the policy action will be coming Thursday,” National Treasurer Roberto Tan said after the auction, referring to the Monetary Board policy meeting.

The MB is the policymaking body of the Bangko Sentral ng Pilipinas.

“It was [six-month paper] undersubscribed, and the yield that banks demanded was even higher than that at the secondary market,” he said.

If the government accepted the bids for the said tenor, yield would have climbed to as much as 3.54 percent, or 109.5 basis points higher than the previous rate.

For the one-year paper, the government made a full award of P4 billion and it fetched a rate of 2.911 percent, or 87.9 basis points higher than the previous yield.

At the secondary market, the done deal for the 364-day notes was at 3.625 percent, or 7.14 basis points higher than that at the government.

For the week, the sovereign’s due and demandable debt stood at P3.2 billion, of which P1.5 billion is already payable against the bond sinking fund.

Analysts are expecting the central bank to raise policy its rates by at least 25 basis points as inflation, the measure of the increases in the price of basic goods and commodities, continues to rise during the past few months.

The BSP expects the country’s inflation hit above 5 percent during the second or third quarter this year before going down in 2012.

The central bank is targeting an average inflation rate of between 3 percent and 5 percent for 2011 and 2012, but that may be breached if actions were not made.