Treasury Bureau rejects all T-bill bids as 'unreasonable'

The Bureau of Treasury on Monday rejected all bids for Treasury bills after banks supposedly submitted unreasonably high offers. Investors are awaiting firmer developments that would convince them to park their funds in government debt papers for the longer term, said National Treasurer Roberto Tan. The market for government securities, at the same time, is echoing the movement in the equities market where investors have begun to pull out their funds amid global market uncertainties, Tan said. “The market is directionless right now," Tan told reporters after Monday’s auction. “There’s no interest on the part of bidders." The market remains volatile with a number of investors still fence sitting, he added. “These are signs that investors are not settled in the market," Tan explained. Responding to questions on whether the government’s cash position could afford a rejection of all the bids, Tan said, “Our action speaks for itself." T-bills' possible average rates If the government accepted the bids, the 91-day T-bill’s average rate would have climbed to 2.775 percent from the current 0.69 percent. This represents an increase of 208.5 basis points. Also, total tenders for the 91-day debt paper would have reached P3.362 billion out of the programmed P2-billion debt sale. This amount is only slightly higher than previous volumes that usually amounted to twice or thrice the programmed debt offers. The 182-day T-bill would have also risen to 3.296 percent from the current 0.682 percent had the government accepted the bids. Investors tendered only P2.22 billion, below the P3 billion that the Treasury Bureau offered. Meanwhile, the 364-day debt paper would have fetched a 3.469-percent average rate from the current 1.133 percent. The bids also did not reach the programmed P4-billion debt offer, amounting to only P2 billion. “These are throw-away bids," Tan said. — PE VS/GMA News