The Bureau of Treasury yesterday rejected all bids on Treasury bills after banks offered higher rates.

Market sources said there was little appetite for government borrowings, with bids totaling only P7.65 billion, as investors held off for corporate bond issues offering higher rates.

?The market was in panic because of supply issues. When there?s a lot of corporate demand, the tendency is for rates to go up. Investors want a premium with the new supply coming in,? a trader from a local bank said.

The Treasury auctioned off P7 billion worth of treasury bills, consisting of P3.5 billion in one-year bills, P2.5 billion in 180-day bills and P1 billion in 91-day bills.

Had the Treasury accepted the bids at yesterday?s auction, rates on the 91-day treasury bills would have risen to 4.719 percent, or close to the yield of one-year bills in the last auction.

?It?s also partly the BTr?s fault,? a trader from a foreign bank said. ?It was saying it was going to issue retail treasury bonds, plus the market knows it has P135 billion [in] maturing bonds this month. You add that up, plus the corporate issues, so whoever wants to borrow now will have to pay a premium because there?s a beeline of issuers.?

Rates on the 91-day bill in the last auction on January 26 averaged at 4.294 percent, 4.565 percent for 182-day bills and 4.761 percent on one-year bills.