INTEREST rate for the 91-day and 182-day Treasury bills rose higher at Monday’s auction, while the interest rate for 364-day T-bills continued to increase due to uncertainties in the international market arising from the Greeks default on their debt payments.
As a result, Monday’s sale resulted only in a partial award on the P6-billion offering for one-year T-bills as investors demanded a higher premium averaging 2.552 percent or 4 basis points higher than the rate demanded two weeks earlier.
This resulted in only a partial award on the 364-day T-bills, with the government accepting only P2.945 billion of the total bids tendered. The auction for the 364-day T-bills was also only very slightly oversubscribed, with total bids amounting only to P6.445 billion versus the P6-billion offering.
“There’s a bigger demand for the shorter-term bonds, because there’s trouble in the international market and they’re looking at the Greek problem. But eventually that will die down,” Finance undersecretary Gil Beltran said.
The demand for short-dated IOU such as the 91-day and 182-day T-bills were much higher, and interest rates on the two tenors were lower this month than at last month’s auction.
For the 91-day T-bills, the interest rate settled at 2.078 percent, which was 6.4 basis points lower than the interest rate last month.
As a result, the government made a full award on the P8-billion offering. The auction for the 91-day T-bills was also oversubscribed, with total bids tendered amounting to P26.945 billion.
Average interest rate on the 182-day T-bills also went down to 2.333 percent, or 1.7 basis points lower than the interest rate last month. The auction for the 182-day T-bills was also oversubscribed, with total bids tendered amounting to P16.5 billion as against the P6-billion offering.
Meanwhile, Beltran said that the interest rates on long-dated government securities would eventually normalize to push lower as apprehension generated by the Greek default on its debt payments are addressed.
He added the Philippines should only be minimally affected by the Greek default since local entities have minimal exposure in terms of trade, for example. Exports to Greece constitute only 0.01 percent of total exports, while total imports from Greece accounts only for 0.02 percent of total imports. Remittances from Greece also constitute only 1.38 percent of the total foreign currency remittances to the Philippines.