35-day treasury bills fetch higher rates

MANILA, Philippines — Government securities maturing in 35 days fetched higher rates as the market anticipates a slightly higher inflation figure for May, according to the Bureau of the Treasury (BTr).

During yesterday’s auction, the BTr fully awarded P15 billion worth of 35-day Treasury bills at an average rate of 2.065 percent, 4.1 basis points higher than the 2.024 percent recorded in the previous auction last May 19.

This was likewise higher than the secondary market rate for comparable securities or one-month debt papers, which settled at 2.017 percent.

The P15 billion offering was more than two times oversubscribed, with total tenders amounting to P34.39 billion.

In a text message to reporters, National Treasurer Rosalia de Leon said rates moved upward amid slightly higher inflationary expectations for the month of May.

Furthermore, she said investor appetite is now leaning toward securities with longer tenors.

“Rates to be within the vicinity of inflation. We see now an appetite for the intermediate part of the curve,” she said.

Meanwhile, the Treasury raised an additional P10 billion from the issuance of 364-day T-bills through its tap facility on Monday.

Earlier, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said inflation last month likely ranged from 1.9 to 2.7 percent, with a point inflation projection of 2.3 percent.

This is slightly higher than the 2.2 percent inflation rate recorded in April.

“Higher domestic oil prices as well as the uptick in the prices of various agricultural products due to supply bottlenecks and the impact of Typhoon Ambo contributed to positive price pressures during the month,” he said.