T-bill, bond rates likely to increase anew

MANILA, Philippines — Treasury bills (T-bills) rates may move sideways next week similar to how short-term securities behaved in the previous weeks, traders said.

However, rates for the reissued five-year Treasury bonds (T-bonds), with a remaining term of four years and five months, may jump by as high as 32.4 basis points next week.

“We expect yields for T-bills to move sideways similar to previous weeks. On the other hand, we project the rates for T-bonds to settle between 3.9 and four percent,” a trader said.

Another trader said investors may look into forecasts on the inflation print for October, as well as the meeting of the Federal Open Market Committee (FOMC) on Monday and Tuesday. They are expected to price in the results of the inflation data and FOMC meeting in their bids not only for this week, but for the rest of November.

“For this week, investors will monitor the inflation data on the local end and the scheduled taper in the United States,” the trader said.

The Bangko Sentral ng Pilipinas (BSP) expects the October inflation to settle within the range of 4.5 percent and 5.3 percent due to price hikes mostly in fuel rates.

The BSP said the cost spikes in electricity bills, fish and fruits, as well as the peso’s depreciation against the dollar, also contributed to the inflationary pressure for October.

“Inflation will be driven largely by the upward adjustments in domestic oil prices. Higher Meralco electricity rates, increased fish and fruits prices and the peso depreciation will provide additional upside pressures,” the BSP said on Friday.