T-bill rates move sideways

Elijah Felice Rosales - The Philippine Star

MANILA, Philippines — Local investors yesterday swarmed the government auction of Treasury bills (T-bills), with yields moving sideways on expectations inflation will fall within manageable levels.

The Bureau of the Treasury awarded in full P15 billion in T-bills as bids for the short-term securities reached P50.764 billion, oversubscribing the auction by more than three times.

National Treasurer Rosalia de Leon said yields for government securities moved sideways due to a projection made by the Bangko Sentral ng Pilipinas (BSP) that July inflation would rise to 4.3 percent.

The rate for the 91-day tenor picked up 0.3 basis point to 1.053 percent while that for the 182-day debt paper dropped by 0.6 bps to 1.401 percent. Tenders for the T-bills exceeded the offer by over three-fold at P16.252 billion and P19.480 billion, respectively.

On the other hand, the rate for the 364-day T-bills went down by 0.6 bps to 1.632 percent. Bids for the full-year securities were three times oversubscribed at P15.032 billion.

“Rates moved sideways with inflation expected to stay within BSP band at four percent for July,” De Leon said in a text message to reporters.

The BSP anticipates inflation or the general increase in commodity prices to register between 3.9 percent and 4.7 percent or an average of 4.3 percent.

Average inflation for the first half stood at 4.4 percent, breaching the government’s target band of two percent to four percent.

The government looks to raise P60 billion in T-bills in August. It also plans to sell P35 billion in Treasury bonds with maturities of 10 years, seven years, 20 years and 11 years, in that order.

Further, the government seeks to borrow P3.02 trillion this year in an effort to speed up measures to contain the spread of the virus. It will secure more than 85 percent of the 2021 debt from local sources.

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