PH T-bill rates rise anew on hopes of steady BSP rates

The Bureau of the Treasury (BTr) made a full award of PHP4 billion after bids were nearly twice at PHP7.65 billion. (Photo: Bureau of the Treasury/Facebook)

MANILA — The strong demand for Philippine government-issued Treasury bills (T-bills) continues to push its rates up on a weekly basis, with this week not being an exemption.

Rate of the benchmark 91-day paper rose to 5.394 percent from 5.350 percent during the auction last December 3.

The Bureau of the Treasury (BTr) made a full award of PHP4 billion after bids were nearly twice at PHP7.65 billion.

Average rate of the 181-day paper inched up to 6.344 percent from 6.305 percent last week. Tenders reached PHP8.525 billion, more than the PHP5 billion offering. The auction committee also made a full award for this tenor.

Rate of the 364-day T-bill increased to 6.585 percent from 6.507 percent in the previous auction.

Bids amounted to PHP7.374 billion, higher than the PHP6 billion offering. This tenor was also fully awarded.

National Treasurer Rosalia de Leon told reporters after the auction that results for the debt paper’s sale remain good.

“We see also that rates have continued to narrow given the expectation that BSP (Bangko Sentral ng Pilipinas) might take a pause,” she said.

BSP’s policy-making Monetary Board (MB) will have its eighth and last rate setting meet on Thursday, December 13.

The Board has hiked the BSP’s key policy rates by a total of 175 basis points this year to help manage inflation expectations following upticks due to, among others, the global oil price increases to above USD80 per barrel last October and the domestic supply constraints of rice, fish, meat and vegetables.

However, inflation has since tapered off after peaking at 6.7 percent last September-October, due partly to government measures aimed at boosting the supply of agricultural products available in the market.

Thus, authorities expect inflation to go back to within target levels of two to four percent in 2019.

This is also the reason why most market players expect the BSP to keep key rates steady during their rate setting meet this week.

De Leon also noted that the Federal Reserve has taken on a more dovish stance lately in response to trade tensions and expectations of slower global growth in coming months.