MANILA, Philippines — As widely expected, rates for government securities further increased across the board following the Bangko Sentral ng Pilipinas (BSP)’s surprise and hefty 75-basis-point rate hike last week.
Rates for short-dated Treasury bills (T-bills) reached a high of 3.4 percent as investors demanded higher yields from the government yesterday.
In turn, the Bureau of the Treasury only made a partial award of P12.9 billion of the P15 billion in T-bills on offer.
Rates for the 91-day T-bills jumped by 38.2 basis points to 2.323 percent from the market pricing of 1.941 percent. This is also higher from last week’s 1.876 percent rate.
Yields for the 182-day short-dated debt papers likewise swelled by 46.6 basis points to 3.083 percent. On a weekly basis, this is up from 2.907 percent.
On the other hand, offers for the 364-day averaged at 3.258 percent, rising by 38.7 basis points. It even reached a high of 3.423 percent. Rates for the one-year tenor also went up week-on-week.
National Treasurer Rosalia de Leon said the latest rates are still a reflection of the aggressive move of the BSP.
“Markets asked for higher rates following the 75-basis-point off-cycle hike by the BSP,” De Leon said.
“Another 50 basis points is also now being put on the table as the Fed turns more aggressive, with possible full percentage point to be delivered during next FOMC (Federal Open Market Committee),” she said.
Last Thursday, the BSP surprised the market with a 75-basis-point increase after back-to-back hikes in May and June.
The policy rate is now back to its March 2020 level. The Monetary Board is expected to deliver another 50-basis-point rate hike by Aug. 18.
The higher local policy rate is seen to increase financing and borrowing costs of the government as well as households, businesses and other institutions.
Meanwhile, the Treasury managed to raise P5 billion each from the 91-day and 364-day T-bills and only P2.9 billion for the 182-day offer.
Overall demand for T-bills attracted P33.523 billion in bids, oversubscribing the auction by 2.23 times. Bids for yesterday’s auction declined by 8.7 percent from last week’s P36.723 billion.
By tenor, bids for the three-month, six-month and full-year securities totaled P16.615 billion, P8.888 billion and P8.02 billion, respectively.