During the auction, the Bureau of Treasury also rejected bids for the 364-day paper, but made a partial award of the 182-day treasury bill offering.

The average yield for the 91-day paper remained at the previous auction’s level of 4.863 percent. The average yield would have risen to 5.087 percent if the bureau opted to award the P1 billion 91-day offering. Total tenders for the paper amounted to P2.225 billion.

The bureau accepted an average yield of 6.312 percent for the 182-day treasury bill. Out of the P4.37 billion total tenders for the paper, only P750 million was accepted by the government. If the bureau allowed a full award, the average yield for the 182-day paper would have risen to 6.322 percent from the previous auction’s level of 6.314 percent.

The one-year paper fetched total tenders of P2.39 billion. If not for the bureau’s decision to reject, the paper would have fetched an average yield of 7.395 percent, up from the previous auction’s level of 7.289 percent.

Traders said concern over inflationary pressure caused by rising oil prices, the small volume of maturing treasury bills this week and the impact of the government’s planned bond swap, boosted bids during Monday’s auction.

Based on government data, a total of R6.4 billion in treasury bills and bonds is set to mature this week.

But the Bureau of Treasury was unperturbed by the high bids and opted to quell the sharp increases in yields.

"The market gave us an opportunity to save cash," said National Treasurer Omar Cruz. "There is hardly any trading in the market, so there is no point in accepting the bids. Besides, I don’t need the cash."

The Bureau of Treasury has also decided to cancel its five- and seven-year treasury bond auction scheduled next month.

"The cancellation is part of the reconfiguration on our domestic borrowings. It is in line with the bond exchange. It is consistent with the strategy, but at the same time founded on the government’s strong cash position," said Cruz.