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By Maricel E. Burgonio, Reporter
Following the demand of banks for higher yields
in the recent weeks, the government will stop offering short-term
debt papers starting next month, the Bureau of Treasury announced
Monday.
Finance Undersecretary Roberto B. Tan, who also
serves as Acting National Treasurer, said the government will offer
the 364-day Treasury bills in April to June this year.
It will not hold auctions for the benchmark
91-day and 182-day T-bills for the next three months.
The 91-day T-bill rate is what banks use in
pricing their loans.
Based on BTR’s bond offering schedule released
Monday, it will offer 364-day paper in the second quarter with total
volume offering of P6 billion monthly or a total of P18 billion
during the second quarter.
Meanwhile, BTR has set treasury bonds offering
of P14 billion each month or a total of P42 billion in the second
quarter.
In April, BTR will offer to bid 3-year and
4-year T-bonds at P7 billion each.
In May, BTR will offer 5-year and 7-year T-bonds
and in June, 10-year and 20-year T-bonds at P7 billion each.
A local trader said the government’s move does
not favor anyone, adding it will make lending “more challenging”
for banks.
“Banks will just negotiate their rates, we
cannot follow the present 4.5 percent. We should consider higher
inflation, commodity prices and petroleum,” trader said.
During the recent short-term debt paper auction,
banks were already asking for 5.026 percent from 4.673 percent
during the last successful auction of the three-month IOU on
February 21.
The trader also said that with its two main
revenue-generating agencies, the Bureau of Internal Revenue and
Bureau of Customs giving notice of their likely inability to meet
collection targets this year coupled with its own inability to raise
money in the recent weeks, the government will have a hard time
sustaining its planned front-loading in the six months of the year.
Earlier, despite BSP’s decision to shut down
some of its special deposit account (SDA) windows, the government
still failed to secure short-term borrowings from the auction of
T-bills.
Financial market players blamed the SDA for the
government’s failure to secure short-term money during the regular
T-bill auctions since the BSP facility, which offered higher rates,
had lured investors.
Tan admitted that the government had expected
lower bids in light of the BSP’s decision last week to shut down
some of its SDA windows and trim the rates on the remaining ones.
“That’s true [but] I think because of a long
weekend ahead of us and the sudden negative news from the US [banks]
would probably [be] standing by,” Tan said, referring to the
“surprising” result of the auction.
Given its failure to secure short-term money,
the government would continue to sell the T-bills through
negotiations, the finance official said. “It’s always been there
[but] we’ll come up with new guide lines. It’s part of our
fund-raising vehicles,” he added.
In the first quarter, BTR announced schedule of
T-bills and T-bonds offering for a total volume of P19.5 billion and
P45 billion, respectively. BTR has set P6.5-billion volume of
offering for T-bill rates for each month, which accounted for P1.5
billion in 91-day, P2 billion for P182-day and P3 billion for
P364-day IOUs.
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