MANILA, Philippines – Interest rates for short-term debt papers eased in Tuesday’s auction with the yield for the benchmark 91-day Treasury bills falling to a record low at 0.775 percent from the previous 1.480 percent.

Tenders for the three-month securities reached P4.1 billion with the auction committee of the Bureau of the Treasury awarding only P1 billion as planned.

Meanwhile the BTr has cancelled next week's auction of P8 billion of 10-year treasury bills.

The bond sale was cancelled due to the domestic bond exchange, which will be launched this week, National Treasurer Roberto Tan said after Tuesday's treasury bill auction.

The government's local bond swap is aimed at extending the maturity of its peso-denominated debt, as well as creating a benchmark for pricing loans for long-gestating infrastructure projects.

Marcelo Ayes, senior vice president for treasury at Rizal Commercial Banking Corporation said the significant decline in yield of three-month debt papers is attributed to strong liquidity in the local market.

At the same time, the rate for 182-day T-bills also dropped to a record low of 1.650 percent from the previous yield of 1.983 percent.

Buyers also swamped the six-month T-bills with bids more than three times above the original size of P2.5 billion or a total of P8.330 billion.

It was likewise a same story for the 364-day debt papers which followed the downward trend after it eased by 5.5 basis points to 2.383 percent from 2.94 percent fetched during a previous auction.

The one-year debt papers were likewise oversubscribed by more than twice as buyers sought to buy P7.96 billion of 364-day T-bills but only P3.5 billion were accepted as planned.

But National Treasurer Roberto B. Tan, who also chaired the auction panel, said the government has no plans to sell additional Treasury bills even after yields fell to record low levels Tuesday.

A total of P20.39 billion were tendered by buyers but the auction panel stuck to its P7 billion borrowing plan for the week.

The successful auction of short-tenor securities came as the government prepares the details of its plan to issue longer-dated peso bonds in exchange for shorter-dated notes. Tan said the treasury bureau may scrap next week’s bond auction should it start the peso bond exchange this week.