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PHL T-bill rates up anew
« on: December 08, 2016, 04:41:13 PM »
PHL T-bill rates up anew
By Joann Santiago

MANILA, Dec. 5 (PNA) -- Rates of the Philippines Treasury bills (T-bills) rose again Monday as banks anticipate an increase in the Federal Reserve’s key rates this month.

Average rate of the benchmark 91-day bill rose to 1.55 percent from 1.48 percent during the auction last November 14.

The auction committee made a full award for this tenor from total bids of Php11.21 billion, higher than the Php8 billion offering.

Rate of the 182-day paper rose to 1.87 percent from 1.80 percent in the previous session.

This tenor was offered for PHP6 billion but received PHP5.218 billion worth of bids. The auction committee awarded PHP3.058 billion worth of this paper.

On the other hand, bids for the 364-day T-bill were rejected after rates rose beyond two percent. This is the second time in a row that bids for the one-year paper were rejected.

It was offered for Php6 billion but total tenders only amounted to Php3.55 billion.

National Treasurer Roberto Tan told reporters after the auction that results of Monday’s auction were “driven mainly by the Fed meeting that is being anticipated.”

Federal Reserve’s Federal Open Market Committee (FOMC) will have its last meeting for the year on December 13-14 and Fed futures show over 90 percent probability of an increase in the key rates.

If the rate hike transpires this will be the second time after the rate increase in December 2015 -- the first in almost a decade.

Tan said these anticipations resulted to investors making “a lot of positions for shorter term” debt instruments.

He said banks are also holding on to cash, citing results of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) auctions last week, which were undersubscribed – the first time it happened since the facility started operations last June.

”A lot of players are now standing on the sideline. Probably (they) will be waiting for the Fed decision and even probably waiting for the reaction of the Bangko Sentral on December 22,” he said referring to the last policy meeting of the central bank’s Monetary Board (MB) for the year.

BTr will have its last Treasury bond (T-bond) auction for the year on Tuesday, wherein PHP25 billion worth of five-year paper will be offered.

Asked for his projection on the demand following Monday’s T-bill auction, Tan declined to comment.

“I don’t want to speculate. I hope we have meaningful bids tomorrow,” he said.

Meanwhile, the National Treasurer said they have to start interacting with banks for the government’s 2017 foreign borrowing program.

He said he has heard that the central bank’s MB discussed the proposal during its meeting Thursday last week but is not sure whether it was approved or not.

”I just heard it was taken up last Thursday. I don’t have any formal notice,” he said.

The government plans to issue up to US$ 2 billion worth of dollar-denominated bond but Tan said only US$ 500 million of which will be fresh issuance.

”All the rest we’ll try to get through liability management,” he said.

Tan said they have not determined the tenor of the planned issuance but he prefers long-term debt instruments.

“We have to start interacting with the banks and see what the proposals would be,” he added. (PNA)

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