The Bureau of Treasury may drop the auction of 91-day debt papers if weak demand continues to persist.

Yesterday, the government rejected all bids for 91-day and 182-day treasury bills yesterday due to high rates.

The average rate of bids for the benchmark 91-day paper was 4.392 percent compared to 3.673 percent at the previous auction on January 21.

The average rate of bids for the 182-day bill was 5.089 percent compared to 4.675 percent on January 21.

The auction committee, however, sold P2.125 of the longer-term 364-day, to raise a part of its P6.5-billion borrowing requirements this week.

Banks submitted just P610 million for the debt, way below the P1.5 billion offer.

Meanwhile, the average rate for the 364-day declined by 64.7 basis points to 5.313 percent from 5.96 percent.

Finance undersecretary and acting national treasurer Roberto Tan said market appetite is clearly for longer tenor bills. "We’ll look at it. We’re studying the behavior of the market," Tan said.

"There’s not much interest on the shorter-term T-bills. The yield is unreasonable. But there’s a pick-up in demand for the longer term," Tan said.

Tan said the government can "afford" to junk the bids as it is awash with cash.

"We have a healthy cash position, we can afford to reject," Tan said.