Philippine benchmark interest rates for short-term loans dipped with strong demand from domestic investors.

At Monday's auction of Treasury bills on May 30, the bellwether 91-day Treasury bill rate, which banks use in pricing their loans, fell to 1.460 percent from 1.675 percent last week.

The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P22.341 billion of the government security or IOU.

Yield on the 182-day T-bill also dropped slightly to 1.812 percent from the previous 1.892 percent as investors were willing to buy P14.955 billion of the six-month IOUs. The government accepted P5 billion as planned.

However, the treasury bureau rejected all tenders for the one-year debt papers. Had the government accepted the bids, the interest rate on the IOU would have risen to 2.716 percent from 1.993 percent four weeks ago when the same tenor was successfully sold.

The one-yield debt papers also attracted very weak demand with tenders of only P5.58 billion against the P5 billion on offer.

National Treasurer Rosalia V. de Leon said the government accepted bids for the three-, and six-month debt papers due to lower rates and healthy demand.

De Leon said the bids were also aligned with the secondary market rates.

“In contrast, full rejection for 364 day with tepid demand and unacceptable rates as market provide buffers for rate advances as hinted by BSP and another aggressive 50bps by Fed to cool down inflation,” she said.