By IRIS C. GONZALES The Philippine Star For the second consecutive auction, the Bureau of the Treasury (BTr) rejected bids for government debt papers after banks submitted unreasonably high offers. Finance Undersecretary and Acting National Treasurer Roberto Tan said banks did not seem serious w

By IRIS C. GONZALES
 

The Philippine Star

For the second consecutive auction, the Bureau of the Treasury (BTr) rejected bids for government debt papers after banks submitted unreasonably high offers.

Finance Undersecretary and Acting National Treasurer Roberto Tan said banks did not seem serious with their bids.

"We found the bids very unreasonable. Apparently, there’s not much demand right now. We decided to reject the bid. I don’t think the banks were serious with their bids," Tan told reporters after the auction.

Had the government accepted the bids, the average rate for the 91-day Treasury bill (T-bill) would have been 4.959 percent from 3.673 percent previously.

The average rate of the 182-day paper would have been 5.612 percent from 4.675 percent previously.

For the one-year paper, meanwhile, the rate would have gone up to 6.041 percent from 5.266 percent previously.

Tan said the government’s auction committee is now seriously looking into scrapping offers of all T-bills and instead issue more Treasury bonds or reduce offers of the short-term papers.

"We are looking at it very seriously," he said.

He also assured that the government did not really have an urgent need for the cash due to its strong cash position.

Other members of the government’s auction committee attributed the increase in the rates to political uncertainties brought about by the testimonies of Rodolfo "Jun" Lozada against the Arroyo administration regarding the controversial $330 million broadband network deal with Chinese firm ZTE Corp.

Lozada is considered the main witness against government officials on the broadband project.

His testimonies at the Senate have prompted militantgroups and civil society organizations to hold variousprotests against the administration.

Treasury officials also blamed investors’ lack ofinterest of T-bills to strong competition from otherinvestment facilities available in the market such asspecial depository accounts.

Through the SDAs, banks’ trust departments andgovernment-owned and controlled corporations can nowpark their funds directly with the central bank whichoffer higher rates compared to government securities.