T-bill yields continue to rise

MANILA, Philippines — Treasury yields for full-year securities reached nearly 2.9 percent during yesterday’s auction, as investors seek refuge from the streak of policy tightening in the country and abroad.

The Bureau of the Treasury yesterday awarded just P13.95 billion of the P15 billion in Treasury bills (T-bills) on offer after bids for all of the short-dated debt papers exceeded market pricing.

The Treasury issued all of the P5 billion on the program for 91-day T-bills, even as rates jumped by 22.9 basis points to 1.855 percent against average quotation.

Also, yields for the 182-day T-bills rose by 46.5 basis points to 2.4 percent, forcing the Treasury to award only P3.95 billion of the P5 billion on board. On the other hand, the Treasury issued all of the P5 billion on offer for 364-day T-bills, capping the rate at 2.63 percent after bids went up to as high as 2.874 percent.

Demand for the short-term bonds amounted to P27.176 billion, oversubscribing the program by 1.81 times. By tenor, bids for the three-month, six-month and full-year securities totaled P14.926 billion, P5.5 billion and P6.75 billion, respectively.

National Treasurer Rosalia de Leon said the debt market sought increased yields in response to last week’s 25-basis-point hike in interest rate delivered by the Bangko Sentral ng Pilipinas (BSP).

“We saw rates climb up from the aftermath of the Monetary Board’s 25-basis-point rate lift to cool down inflation,” De Leon said in a text message to reporters.

“Markets provided cushion as they see policy rates continue to be on a hiking cycle to let steam out of inflationary pressures,” she added.

According to De Leon, investors expect the BSP to pull the trigger on another 25-basis-point increase in its August meeting. Further, they anticipate the US Fed to fire a series of 75-basis-point hikes to combat inflation.