T-bill rates rise across the board

MANILA, Philippines — Rates for the government’s short-term securities went up across the board as investors expect that policy easing here and abroad will likely be pushed further down the road.

The Bureau of the Treasury yesterday fully awarded P15 billion in T-bills, marking the seventh straight week of raising the entire target amount.

Rates rose for all tenors on a weekly basis as the market reacted from the still hawkish stance of the Bangko Sentral ng Pilipinas (BSP) last week after it kept policy rates unchanged at a near 17-year high.

This as the BSP said risks to the inflation outlook continue to lean toward the upside as price pressures linger particularly on food and transport costs.

At the global front, the US Federal Reserve is also seen delaying its rate cuts to the third quarter instead of the earlier expectation of June, as inflation remains a concern.

Investors are looking at the BSP to largely move in lockstep with the Fed, which could merit an easing only by the latter part of 2024.

During yesterday’s auction, rates across the board went up from the previous week’s auction but were mixed in reference to the secondary market.

All tenors were fully awarded at P5 billion each.

Rates for the 91-day T-bills jumped 9.7 basis points to 5.87 percent from the reference rate and significantly rose from last week’s rate of 5.772 percent.

The 182-day short-dated debt papers also saw rates increase by 8.8 basis points to 5.973 percent week-on-week and up by 7.6 basis points from the secondary market.

Likewise, the rates averaged 6.044 percent for the 364-day T-bills, 6.1 basis points higher from last week but 0.7 basis points slightly down from the reference rate.

Overall demand for the short-term securities slipped by a measly 0.27 percent week-on-week. Total bids reached P39.831 billion, oversubscribing the auction by 2.65 times.

Bids went up to P10.939 billion and P15.26 billion for the three-month and one-year T-bills, respectively, but decreased to P13.632 billion for the six-month offer.

For April, the Treasury aims to borrow P195 billion from domestic creditors. Of the total amount, P75 billion will be sourced from short-dated T-bills. It has so far raised P47 billion.