Local T-bill rates up anew 

By Joann Villanueva

April 23, 2018, 9:15 pm

MANILA -- Banks continue to prefer shorter-dated Philippine Treasury bills, resulting in the partial award of the longer-tenor securities.

The rate of the benchmark 91-day Treasury bill rose to 3.597 percent during the auction by the Bureau of the Treasury (BTr) Monday. This is higher than the 3.493 percent the debt paper fetched last week.

Amid the uptick in rates, the auction committee made a full award after the tenor attracted strong demand and registered Php10.914-billion worth of bids, higher than the Php5 billion offering. Also, the six-month paper's rate inched up to 3.889 percent from 3.684 percent in last week’s auction.

Banks submitted Php4.085 billion worth of bids, higher than the Php4 billion offering but the auction committee only accepted Php3.486 billion worth of tenders. Rate of the one-year paper rose to 3.986 percent from last week’s 3.830 percent.

It was offered for Php6 billion but banks submitted tenders amounting to Php2.88 billion. The auction committee accepted Php1.630 billion worth of bids.

A trader said banks continue to prefer the bellwether T-bill due to concerns on the rising domestic inflation rate. The rate of price increases in the first quarter this year averaged at 3.8 percent, although still within the government’s two to four percent target until 2018.

However, inflation last March alone rose to 4.3 percent from the previous month’s 3.9 percent. This was due to the continued double digit growth of alcoholic beverages and tobacco due to sin tax hikes and on certain non-alcoholic beverages because of the newly-introduced excise tax on sugar-sweetened beverages.

Monetary officials said inflation is expected to remain high this year but is unlikely to exceed the 3.8 percent target. They expect inflation to normalize late in the first quarter of 2019 and will average three percent next year. (PNA)