By Lawrence Agcaoili

The Bureau of Treasury allowed the yield of the benchmark 91-day and 182-day treasury bills to rise on the back of inflation worries and the smaller rate cut of the Monetary Board last week.

National Treasurer Roberto Tan told reporters after yesterday?s auction the 91- and 182-day debt papers fetched higher rates while the yield of the 364-day T-bills slightly declined.

?There are some mixed results because of the somewhat disappointing result or outcome of the policy rate decision of 25 basis points rather than the expected 50 basis points which the market expected,? Tan said.

The Monetary Board reduced its key policy rates on March 5 by 25 basis points, bringing the overnight borrowing rate to 4.75 percent from 5 percent and the overnight lending rate to 6.75 percent from 7 percent.

Investors had expected a reduction of 50 basis points but the release of higher inflation resulted in a lower reduction. Inflation rose 7.3 percent in February from 7.1 percent in January and was on the higher end of the 6.5 percent to 7.5 percent forecast of the Bangko Sentral.

?There is weariness on the February inflation it was on the higher side on the upper limit of the BSP forecast,? Tan said.

The national treasurer said there was strong interest on the P7-billion offering as tenders totaled P12.798 billion.

?Generally it was positive. The interest is very strong based on the tenders submitted. It was an oversubscription in terms of the three tenors,? Tan said.

The yield of the benchmark 91-day debt papers?used by banks in pricing their loans?inched up by 10 basis points to 4.394 percent from 4.294 percent on Jan. 26. Bids for the P1-billion issuance reached P2.395 billion.

The 182-day T-bills fetched 4.654 percent or 2.9 basis points higher than 4.625 percent on Feb. 23. Tenders amounted to P3.608 billion but the auction committee only made a partial award of P2.278 billion.

Had the committee made a full award of P2.5 billion, the three-month debt paper would have gone up by 5.6 basis points to 4.681 percent.

The yield of the 364-day T-bills dropped 1.3 basis points to average 4.748 percent from 4.761 percent on Jan. 26. Bids for the P3.5-billion issuance reached P6.795 billion.