PH T-bill rates up on inflation concerns

National Treasurer Rosalia De Leon said this uptick was expected given continued concerns on price increases and the possible hikes in the policy rates of the Bangko Sentral ng Pilipinas (BSP) in August and the Federal Reserve in the coming months. (Photo: Bureau of the Treasury/Facebook)

MANILA — Worries about rising inflation and the impact of further interest rate hikes both here and overseas evidently pushed Philippine Treasury bills to go the same direction on Monday.

Average rate of the bellwether 91-day bill rose to 3.291 percent from last week’s 3.308 percent.

National Treasurer Rosalia De Leon said this uptick was expected given continued concerns on price increases and the possible hikes in the policy rates of the Bangko Sentral ng Pilipinas (BSP) in August and the Federal Reserve in the coming months.

BSP hiked its key rates by a total of 50 basis points, at 25 basis points each last May and June. To date, rate of the central bank’s overnight reverse repurchase (RRP) facility is now at 3.50 percent.

Last June, the Fed increased its key rate by 25 basis points to 1.75 to two percent and analysts expect two more increases in the second half of the year.

De Leon said market players are ensuring that they continue to register gains from their investments, thus, the demand for higher rates as seen in thecc’s (BTr) weekly auctions of both the T-bills and Treasury bond (T-bond).

“So even for the short end of the curve we still see that there is a lot of demand particularly because they want to just stay on the short (term),” she said.

Demand remained strong for the three-month paper as seen from the Php13.528 billion worth of bids, higher than the Php4 billion offering. The auction committee, however, accepted only Php4 billion.

Similarly, rate of the 182-day paper averaged at 4.185 percent from the previous week’s 4.045 percent.

The auction committee made a partial award for this tenor at Php3.424 billion, lower than the Php5 billion offering despite the higher-than-offered tenders amounting to Php8.086 billion.

It was the same situation for the 364-day bill, rate of which rose to 4.767 percent from the previous auction’s 4.670 percent.

Banks submitted Php6.587 billion worth of bids, higher than the Php 6 billion offering but the auction committee only accepted Php4.677 billion.