ASEAN KEY DESTINATIONS
Philippine interest rates fall
The auction committee fully-awarded its P1 billion three-month IOUs on offer, even as tenders were at least three times higher at P4.1 billion.
"I've never heard rates go below one percent, only now," National Treasurer Roberto Tan said after the auction.
He said most investors have "scrambled" for government debt notes just so they could park their money "for the meantime."
"We will no longer hold our remaining weekly auction in December to make way for our planned bond exchange. And I suppose that is likewise the reason why bankers yielded for negative interest," Tan said.
With inflation slumping to an 11-month low of 2.8 percent last month, the latest auction result meant that the three-month real interest rate is already in negative territory.
The rate on the 182-day T-bill similarly fell by 33.3 basis points to 1.650 percent from the previous 1.983 percent. Banks bid for as much as P8.330 billion but the government stuck to its original offer of P2.5 billion for the six-month debt papers.
For the one-year IOUs, the government raised P3.5 billion even though tenders reached P7.960 billion.
The rate on the 364-day papers fell to 2.383 percent from 2.394 percent when similar securities were sold two weeks ago.
Tan said the market for government securities unlike the capital market remain resilient amid the escalating tensions between the two Koreas as most of the investors for Treasury papers were Filipinos.
"Although the Bangko Sentral ng Pilipinas offers SDA [special deposit accounts] a yield of 4 percent, SDAs are not tradable, while Treasury bills and bonds can be sold anytime," he said.
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