Treasury caps rise in T-bill rates

MANILA, Philippines — The Bureau of the Treasury (BTr) yesterday capped the increase in Treasury bill (T-bill) rates ahead of the rate setting meeting of the Bangko Sentral ng Pilipinas (BSP).

National Treasurer Rosalia de Leon said the auction committee decided to make a partial award across all tenors to cap the increase in interest rates.

“There is oversubscription in the auction so we awarded partially only given that we don’t see the need for any significant increase in the rates,” De Leon said.

The P20-billion offering was oversubscribed as tenders for the 91, 182, and 364-day T-bills amounted to P24.92 billion.

Bids for the 91-day T-bills reached P6.68 billion versus the issue size of P6 billion and the auction committee only made a partial award of P3.38 billion.

On the other hand, tenders for the 182-day T-bills amounted to P9.48 billion compared to the volume of P6 billion and the committee awarded only P4.96 billion.

Likewise, bids for the 364-day T-bills reached P8.77 billion, higher than the issue size of P8 billion. The committee made a partial award of P5.09 billion.

The yield of the 91-day T-bills inched up seven basis points to 5.786 percent from last week’s 5.716 percent, while the rate of the 182-day climbed 5.1 basis points to 5.987 percent from 5.936 percent.

Likewise, the 364-day T-bills fetched a higher rate of 6.051 percent or 3.3 basis points higher than the 6.018 percent last week.

De Leon said investors are asking for rates that are higher than the secondary market yields.

The national treasurer said the BSP may keep interest rates on hold this Thursday with the continued easing inflation.

“With decelerating inflation, at the same time we all know given also the projections that BSP when they hold their policy meeting on Thursday most likely they would hold rates steady,” she said.