THE GOVERNMENT made a partial award of the Treasury bills (T-bill) it planned to raise on Monday, with yields ending mixed as investors flocked to the shorter tenor.

The Bureau of the Treasury’s offer yesterday was met with tenders of P26.93 billion, slightly above the P20 billion it placed on the auction block, but only accepted P13.36 billion worth of bids.

Broken down, the government fully awarded the P9 billion in 91-day notes it offered, with bids soaring to P16.12 billion. The paper fetched a 2.995% average yield, down from the 3.024% quoted in the previous auction.

For the 182-day tenor, only P3.584 billion of the P5.834 billion banks and financial firms wanted to lend was accepted, about half the P6 billion the Treasury wanted to raise. The average yield rose to 3.206% from 3.165% previously.

Meanwhile, the government borrowed only P3.779 billion via the 364-day T-bills even as tenders reached about twice as much at P4.979 billion, slightly below the P5-billion offer. Yields fetched likewise rose for the one-year paper at 3.434% from the 3.311% in the previous auction.

At the secondary market before the auction, the three-month, six-month and one-year papers were quoted at 3.2768%, 3.2904% and 4.1396%, respectively.

As trading closed, the yield on the 91-day T-bill was steady, while the 182-day paper’s rate rose to 3.3082%. The 364-day tenor, meanwhile, saw its yield inch down to 4.1389%.

After the auction, National Treasurer Rosalia V. De Leon said investors have already started to digest the inflation expectations of the Bangko Sentral ng Pilipinas.

“The market is continuing to digest the inflation path as already conveyed by the that 2019 will trend back to the inflation target of 2-4% and what we’re having right now is transitory,” Ms. De Leon told reporters.

Last week, the BSP decided to keep their monetary policy rates steady as they noted that the inflation path is unlikely to change.

“The [Monetary Board] also decided for a stay in policy rates so they don’t see really any inflationary expectations rising so the setting continues to be appropriate,” the national treasurer said.

Ms. De Leon noted that the market also considered the decision of the US Federal Reserve to raise its borrowing rates as well as the protectionist move of President Donald J. Trump against China.

Last week, the Fed hiked its interest rates, putting the new benchmark overnight lending rate from 1.5% to 1.75%.

Fed Chair Jerome H. Powell attributed the hike to the “more stimulative” fiscal policy brought by the tax reform law passed last year.

Also last week, Mr. Trump slapped new tariffs on Chinese goods worth about $50 billion following a seven-month investigation into alleged intellectual property theft.

In response, Liu He, China’s top economic leader, warned US Treasury Secretary Steven Mnuchin in a phone call on Saturday that they are ready to defend its national interest.

Meanwhile, a trader said the results of yesterday’s auction were within expectations.

“As expected, [yesterday’s] auction received demand from the shorter end which is the 91-day [bills],” the trader said by phone, adding that the Treasury was prompted to reject some bids for the three-month and six-month papers “given the higher bids and the longer tenor.” — Karl Angelo N. Vidal

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