Treasury bill rates up for all tenors

MANILA, Philippines — Treasury bill (T-bill) rates went up across the board at yesterday’s auction amid healthy demand from investors, the Bureau of Treasury (BTr) reported yesterday.

During yesterday’s auction, the BTr was able to award P4 billion in 91-day T-bills at an average rate of 3.261 percent, 4.2 basis points higher than the 3.219 percent recorded in the previous auction.

Healthy demand met the auction with total tenders reaching P9.585 billion, more than twice the original issuance volume.

Likewise, rates for the 182-day T-bills rose to 4.294 percent, 5.9 basis points higher than last week’s level of 4.235 percent.

The auction was almost thrice oversubscribed with bids amounting to P13.05 billion.

A total of P6 billion worth of 364-day T-bills were also fully awarded by the auction committee at an average rate of 4.9 percent. This was 9.1 basis points higher than the 4.809 percent fetched by the same securities the previous auction.

Total tenders reached P13.18 billion, more than twice the original offering volume.

In an interview, National Treasurer Rosalia De Leon said the market continues to ask for higher yields given that the Bangko Sentral ng Pilipinas (BSP) hinted at a possible rate hike in August.

De Leon also cited the strengthening of the US economy, which she said increases market’s expectations on the likelihood of another policy tightening from the US Federal Reserve.

“It’s something that we expected, that they will be asking for incremental yields again given already the pronouncement of the BSP, and of course, the result of the GDP of the US for the second quarter, 4.1 percent,” De Leon said.

“That is increasing the likelihood that the Fed will continue with its tightening and we’ll see what would by the measures to be taken by the Fed which will be meeting on Aug. 1. I guess all of these have already been priced in,” she said.

Despite this, De Leon said the rate of increase in the yields have slightly tempered down from the previous auctions.

“It’s at least five to 10 basis points, unlike before where you have seen double digits in the range of 30 basis points. So I think hopefully this is the start of the plateauing of the (rates) and of course, we have to wait for the outturn of inflation for July on Aug. 6,” she said.