T-bill rates rise across the board

MANILA, Philippines — Treasury bill (T-bill) rates rose across the board as the Bureau of the Treasury (BTr) made a partial award during yesterday’s auction.

The BTr awarded 61 percent or P9.137 billion of the P15 billion worth of T-bills on offer, even as yields for the short-dated securities exceeded market pricing across the board.

Demand for the debt papers reached P23.349 billion, oversubscribing the auction by 1.56 times and growing by nearly 10 percent from last week’s P21.234 billion.

Yields for the 91-day T-bills jumped by 16.9 basis points to 1.305 percent, while those for the 182-day T-bills rose by 18.4 basis points to 1.458 percent. Rates for the 364-day T-bills averaged 1.734 percent, beating the market quote by 7.6 basis points. The full-year securities piled up a demand worth P7.17 billion.

The three-month tenor obtained P8.959 billion in bids, which the six-month program fetched P7.22 billion in tenders.

Broken down, the Treasury awarded P3.037 billion, P3 billion and P3.1 billion for each of the P5 billion on board for 91-day, 182-day and 364-day T-bills, respectively.

After rejecting all bids for the past two weeks, yesterday’s auction marked the first time the Treasury accepted bids for T-bills.

National Treasurer Rosalia de Leon, said the Treasury only made a partial award in anticipation of increased yields in the coming weeks, fueled by the escalating conflict between Russia and Ukraine and the looming hike in US Fed rates.

“We made a partial award for all tenors. Rates continue to move up in tandem with a surge in oil and commodity prices and as the market priced in liftoff in Fed rates,” De Leon told reporters.

The Federal Open Market Committee will convene on March 15 and 16 to decide whether it will trigger the first round of rate hikes to weather inflation. US inflation spiraled to a 40-year high of 7.9 percent, putting the Fed in a tight spot to raise interest rates.

By increasing interest rates, the Fed hopes to drive borrowing costs up, reduce demand for big-ticket items and, in turn, tame inflationary stress.

On the domestic end, the Bangko Sentral ng Pilipinas plans to maintain accommodative rates to support the public and private sectors in their recovery efforts.