T-bill rates rise across the board

MANILA, Philippines — Yields for short-dated Treasury bills (T-bills) went up across all tenors as investors factored in risks posed by geopolitical and monetary concerns abroad.

The Bureau of the Treasury yesterday awarded in full the P15 billion T-bills on offer, with demand nearly triple the auction volume at P41.234 billion.

Yield for the 91-day T-bills – the benchmark for short-term credit – grew by a basis point to 0.81 percent while the 182-day T-bill rate went up by 4.4 bps to 1.066 percent. The 364-day T-bills spiked by 6.7 bps to 1.475 percent.

National Treasurer Rosalia de Leon said investors went to the government auction worried that the US Federal Reserve may hike interest rates by as much as 50 bps in March.

Further, the brewing tension at the borders of Russia and Ukraine, with the former cornering the latter with its military forces, is sending chills down investors’ spine on the uncertainties it could cause to the markets.

“Rates moved up with heightened concerns on Ukraine and speculation of the Fed hiking rates by as much as 50 bps in March,” De Leon said in a text message to reporters.

In spite of the challenges in raising new debts, De Leon said the government stands optimistic on the prospects of borrowing enough funds for the 27th tranche of retail Treasury bonds (RTBs). The Treasury plans to borrow a minimum of P30 billion from small-scale investors through the sale of RTBs.

De Leon said the Treasury can raise such an amount given that inflation in the Philippines has subsided for five months now as against in the US where the headline figure hit a four-decade high. She added the Bangko Sentral ng Pilipinas (BSP) has stood by its policy to keep interest rates at record lows to support economic rebound.

“[We have] no target size for the RTBs, [but] should differentiate us from US and Europe given the inflation and liquidity dynamics,” De Leon said.

“The BSP still has buffers to deploy to support our recovery,” she added.