Benchmark yields move sideways

Benchmark yields moved sideways amid expectations of higher interest rates following the US Federal Reserve’s decision to begin its stimulus tapering.

At Monday's auction, Nov. 29, the 91-day Treasury bill rate, which banks use in pricing their loans, slightly went down to 1.164 percent from 1.178 percent in the last auction on Nov. 24.

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The yield for the 182-day T-bill, on the other hand, marginally rose to 1.449 percent from 1.443 percent, while the 364-day rate inched up to 1.636 percent from 1.628 percent previously.

The treasury bureau accepted P10 billion worth of bids as it had planned to sell. Investors however were willing to buy more, as tenders reached P37.65 billion.

National Treasurer Rosalia V. De Leon said the government saw strong demand on Monday’s T-bill offering following reduced volume for December auctions.

“Interest rates hardly moved even after start of Fed taper and expectations of rates heading north,” de Leon told reporters.

For December, the treasury bureau scaled down its domestic borrowing program due to strong demand for the retail bond offering (RTB) and fewer working days.

The national government plans to borrow only P70 billion from local creditors next month, lower by 65 percent compared with the P200 billion program in November.