T-bill rates rise. across the board

MANILA, Philippines — The Bureau of the Treasury yesterday awarded in full the P15 billion Treasury bills (T-bills) on offer, as rates increased across all tenors following expectations of a higher inflation print in October.

Investors swamped the T-bill auction with P41.78 billion in total bids, oversubscribing the offer by nearly three times.

Yield for the 91-day T-bills, the benchmark for short-term credit, went up 1.1 basis points to 1.13 percent, the 182-day securities rose 0.8 bp to 1.395 percent, while the  364-day papers grew 0.7 bp to 1.613 percent.

National Treasurer Rosalia de Leon said the Treasury gave in to the yields sought by investors to price in the risks posed by the inflation print for October and taper schedule in the US.

“[Investors are] waiting for October inflation and the (US) Fed announcement on taper start,” De Leon said in a text message to reporters.

The Bangko Sentral ng Pilipinas (BSP) expects October inflation to range from 4.5 to 5.3 percent due to price increases mostly in fuel.

“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 last week.

Overseas, the US Federal Open Market Committee will announce this week its schedule in bringing down the volume of the Fed’s asset purchases. The Fed plans to withdraw its monetary support to the economy which is now showing signs of recovery.

The Fed looks to wrap up the taper by raising interest rates within the first semester of 2022.