T-bills fetch higher rates across the board

MANILA, Philippines — Short-term government securities yesterday fetched higher rates across-the-board as the market continued to express concern over the ongoing eruption of Taal Volcano, the Bureau of the Treasury (BTr) said yesterday.

During yesterday’s auction, rates for the 91-day Treasury bills (T-bills) settled at 3.39 percent, 6.2 basis points higher than the 3.328 percent recorded in the previous auction.

The P6 billion offering was more than twice oversubscribed, with total tenders amounting to P13.927 billion.

Meanwhile, the six-month debt papers fetched an average rate of 3.652 percent after the auction committee decided to cap the accepted rates at 3.7 percent. However, this is still 6.5 basis points higher than the 3.587 percent rate secured by the same securities last week.

Total tenders amounted to P8.27 billion, higher than the P6 billion offer size, but only P3.02 billion was awarded.

Lastly, the auction committee also decided to cap the accepted rates for the 364-day T-bills at four percent. As a result, the debt notes fetched an average rate of 3.971 percent, which is still 7.5 basis points up from last week’s level of 3.896 percent.

Healthy demand met the P8 billion offering, with total tenders amounting to P11.305 billion. However, only P5.685 billion was awarded.

Sought for comment, National Treasurer Rosalia De Leon said rates are up due to lingering concerns over the Taal eruption and its impact on inflation and the economy.

“That’s expected because right now, it’s still very fluid because of the impact of volcanic eruption. We’re still at alert level 4,” De Leon said.

However, the national treasurer echoed the statements of Socioeconomic Planning Secretary Ernesto Pernia and Finance Secretary Carlos Dominguez, who both said that this calamity may not have a significant impact on inflation.

“We have already heard from NEDA and Secretary Dominguez that there’s really no need for alarm. Even if there will be cuts in (food) production, there will be other regions to fill the gap. They see that inflation won’t go up significantly,” she said.