MANILA – Rates of Treasury bills (T-bills) rose across-the-board Monday on concerns about the rise of domestic inflation and uncertainties on when the Bangko Sentral ng Pilipinas (BSP) will hike key rates.The rate of the benchmark 91-day paper rose to 3.024 percent, higher than the 2.67 percent in the previous auction but lower than the 3.4523 percent in the secondary market after Monday’s morning session.
The Bureau of the Treasury (BTr) offered it for PHP9 billion but awarded only PHP7.773 billion even as tenders reached PHP16.123 billion.
The average rate of the six-month paper also increased to 3.165 percent from 2.854 percent previously. Its rate in the secondary market after the morning session stood at 3.7143 percent.
It was offered for PHP6 billion and the auction committee accepted only PHP3.515 billion due to the rate uptick. Total tenders reached PHP6.715 billion.
Rate of the one-year paper went up to 3.311 percent from 3.040 percent previously. In the secondary market, its rate was lower at 3.0441 percent.
This tenor was undersubscribed at PHP3.785 billion against the PHP5 billion offering. The auction committee still accepted PHP1.885 billion worth of tenders.
National Treasurer Rosalia De Leon said investors submitted bid rates that were higher than what the auction committee estimated, hence the partial award for all tenors.
She traced the high yield demand to uncertainty on how many rate hikes will be implemented this year alone by both the BSP and the Federal Reserve.
She said the faster inflation rate last February at 3.9 percent, based on the rebased year of 2012 instead of 2006, is also a concern among investors.
“Again market is pricing all these uncertainties in the rates that they submitted during the auction,” she added.
Meanwhile, De Leon said Philippine financial officials are hoping that the planned Panda bond issuance will get an investment grade rating.
“We are watching the market closely and if there will be an opportunity for us to be able to go ahead and trigger the issue then we will do so,” she said.
Bank of China, which the Philippine government tapped as underwriter and bookrunner for the proposed Panda bond issuance, has informed Finance Secretary Carlos Dominguez III that the People’s Bank of China and China’s National Association of Financial Market Institutional Investors approved the Philippines’ planned Panda bond issuance last February 9.
Panda bonds are renminbi-denominated debt papers issued by a non-Chinese issuer in China.
The Philippines plans to issue about USD200 million worth of Panda bonds once it sees the right timing within the year.
De Leon said “things are getting favorable for us so we are just discussing with the underwriters what will be the price guidance and if it’s competitive with our own pricing and the dollar space.”
“Hopefully we get even better (pricing) because it’s very minimal, just the equivalent of USD200 million. It’s really just making our mark in the onshore renminbi market,” she added. (Joann Villanueva/PNA)
