T-bill rates continue to climb

MANILA, Philippines — Treasury yields for full-year bonds nearly hit the four percent level due to monetary and political uncertainties hounding the debt market.

The Bureau of the Treasury yesterday issued only P8.5 billion of the P15 billion in Treasury bills (T-bills) on offer, as yields for the short-dated securities jumped across the board.

The Treasury awarded all of the P5 billion on offer for 91-day T-bills even as rates for the tenor exceeded market pricing by 21.2 basis points to 1.675 percent.

Further, rates for the 182-day T-bills surpassed average quotation by 13.7 basis points to 1.892 percent. For the six-month debt papers, the Treasury borrowed just P3.5 billion of the P5 billion offer.

The Treasury rejected all bids for the 364-day T-bills. Had the agency awarded the full-year securities, it would extend yields at an average of 2.93 percent from a low of 2.1 percent to a high of 3.925 percent.

A bond trader told The STAR that investors are no longer interested in buying 364-day bonds due to political uncertainties in the domestic market and geopolitical tensions abroad.

Presumptive president Ferdinand Marcos Jr. has yet to name all the members of his economic team, who would help him craft the government’s plan to combat a double deficit and surging inflation.

Likewise, the trader said investors are starting to price in the impact of rate hikes pursued by the Bangko Sentral ng Pilipinas (BSP) and the US Fed, both of which are concerned that inflation may soar with commodity prices rising due to Russia’s attacks against Ukraine.

“For now, the debt market has no appetite for one-year bonds as they focus their purchases on the 91-day and 182-day tenors. Investors are growing wary of the risks posed by the rate hikes and political uncertainties, including geopolitical conflicts,” the trader said.

National Treasurer Rosalia de Leon told reporters that the debt market would stay on the defensive for as long as inflationary pressures persist and monetary policies are tightened.