T-bill rates ease ahead of Fed meet

MANILA, Philippines — Rates for the government’s short-term securities eased for the second straight week ahead of the monetary policy decision of the US Federal Reserve.

The Bureau of the Treasury yesterday fully awarded the entire P15 billion of T-bills on offer.

Yields for the three tenors declined across the board in reference to last week’s rates, but were mixed versus the secondary market.

Rates for the 91-day offer slipped 2.9 basis points to 5.744 percent from the secondary level of 5.773 percent and were lower than the last auction rate of 5.772 percent.

Yields averaged 5.916 percent for the 182-day T-bills, 6.9 basis points below the secondary rate and also down from last week’s 5.966 percent.

The 364-day short-dated debt papers saw rates at 6.033 percent, slightly higher by 1.3 basis points from the reference rate of 6.02 percent, but below last week’s level of 6.087 percent.

The Treasury awarded P5 billion in each tenor.

Yields were lower as the market anticipates the upcoming Fed rate-setting meeting.

The Fed has kept rates unchanged for four straight meetings already. It has raised borrowing costs by 525 basis points.

Meanwhile, T-bill demand went down by seven percent week-on-week to reach P47.24 billion. The auction was oversubscribed by 3.15 times.

Bids went up to P14.21 billion and P20.36 billion for the three-month and one-year offers but dropped to P12.67 billion for the six-month tenor.

For this month, the Treasury aims to borrow P180 billion from local creditors. Of this, P60 billion is expected to come from short-dated T-bills. It has so far raised P45 billion.