BTr rejects bids for all Treasury bills at auction

The Bureau of the Treasury (BTr) rejected on Monday all the bids for the 91-, 182-, and 364-day Treasury bills as investors submitted unreasonably high bids for the three tenors. Investors were "too much" concerned about the impending price hike in Asia, National Treasurer Roberto Tan said in an interview. Tan, however, pointed out that lingering inflation concerns in the Philippines were unfounded as the rate of inflation last year remained within expectations. National Statistics Office records showed that inflation settled at 3.8 percent on average last year, or within the 3.5-percent to 5.5-percent forecast range. According to government data, the BTr planned to sell P8.5 billion for the 91-day paper, P3.5 billion for the 182-day paper, and P4 billion for the 364-day paper during Monday's auction. If the government accepted all the bids, the average rate of the 91-day T-bill would have risen 264 basis points to 3.34 percent. The 182-day debt paper would have increased 252.9 basis points to 4.092 percent, and the 364-day paper 198.3 basis points to 4.439 percent. Government's auction panel decided to reject the bids as they were outside expectations. "The bids were grossly misaligned with secondary rates," Tan said. Government could afford to reject all the bids because of its comfortable cash position, he added. Monday's debt sale was part of the Aquino administration's program to borrow P114 billion from the domestic debt market for the first quarter of 2011. The BTR is planning to sell P51 billion in T-bills and P63 billion in Treasury bonds this January to March. — JE/VS, GMANews.TV