T-bill rates post mixed results Monday

MANILA – -Rates of the Philippine Treasury bills (T-bills) posted mixed results Monday.

Average rate of the benchmark 91-day paper declined to 2.995 percent from 3.024 percent during the auction last March 12.

In the secondary market, rate of the same tenor is higher at 3.2768 percent.

Bureau of the Treasury (BTr) offered the paper for PHP9 billion and banks offered a total of PHP16.12 billion bids. It was awarded in full.

On the other hand, rate of the 182-day paper averaged at 3.206 percent, up from the previous auction’s 3.165 percent. Its rate in the secondary market Monday morning stood at 3.2904 percent.

Bids reached PHP5.834 billion, lower than the PHP6 billion offering. The auction committee only accepted PHP3.584-billion worth of tenders.

Rate of the 364-day paper rose to 3.434 percent from 3.311 percent last March 12. In the secondary market, the same tenor fetched a rate of 4.1396 percent.

It was offered for PHP5 billion but tenders only amounted to PHP4.979 billion. The auction committee accepted PHP3.779 billion worth of bids.

National Treasurer Rosalia de Leon said market players still prefer the shorter-tenor debt paper.

She, however, cited that yields asked by banks have declined a bit to about 10 to 17 basis points from about 30-40 basis points in the past.

“Maybe the market is continuing to digest about the inflation path that the BSP has already conveyed – – that in 2019 they will again tread back to the target of two to four percent,” she said.

Last week, the BSP’s policy-making Monetary Board (MB) said it forecasts this year’s inflation to average at 3.9 percent and three percent for next year using 2012 as base year.

Using the 2006 base year, inflation is seen to average at 4.5 percent this year and 3.5 percent next year.

For both base years, only the 2018 forecast exceeded the government’s two to four percent inflation target for 2017-19.

The Philippine Statistics Authority (PSA) is using a new base year, 2012, for its inflation reports although it will continue to issue figures using the old base year until June this year.

Using the rebased index, rate of price increases as of last February rose to 3.9 percent from the previous month’s 3.4 percent.

Based on the 2006 base, inflation rose to 4.5 percent from four percent last January.

De Leon said the MB does not see any need to hike BSP’s rates even with the inflationary pressures “so the setting continuous to be appropriate.”

“So, I think, that is also being digested by the market,” she said but also noted that this is being countered by the hike in the Federal Reserve rates and the protectionist moves in the US.