MANILA -- The rates of Philippine Treasury bills (T-bills) rose across-the-board Monday, as National Treasurer Rosalia De Leon revealed that yields being sought by investors have moderated compared to recent weeks.
Average rate of the bellwether 91-day T-bill went up by 9.80 basis points to 5.077 percent from last week’s 4.979 percent.
The auction committee made a full award of PHP4 billion while tenders reached PHP4.67 billion.
Rate of the 182-day paper averaged at 6.233 percent, 7.40 basis points higher than the 6.159 percent during the auction last week.
The paper was offered for PHP5 billion and attracted bids that are nearly twice this amount at PHP9.032 billion. The auction committee made a full award.
Average rate of the 364-day T-bill rose by 9.6 basis points to 6.506 percent from the previous week’s 6.410 percent.
It was also oversubscribed at PHP9.244 billion, higher than the PHP6 billion offering. The auction committee also made a full award for this tenor.
National Treasurer Rosalia De Leon told reporters after the auction that although appetite for the debt paper has returned investors remain cautious.
She attributed this to wait-and-see stance for the October 2018 inflation print, which is scheduled to be released by the Philippine Statistics Authority (PSA) Tuesday.
She said some analysts have projected the plateauing of rate of price increases after hitting 6.7 percent last September while the she is considering a possible drop.
She also noted that the Department of Finance (DOF) forecasts the October 2018 inflation level to decelerate to 6.5 percent.
“Obviously there should already be a lot of significant impact coming from the measures adopted by the government to be able to moderate inflation and anchor inflationary expectations,” she said.
De Leon was referring to the total of 150 basis points increase in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates this year alone.
Additional measures are the issuances by Malacanang directing several government agencies like the National Food Authority (NFA) and the Department of Agriculture (DA) to ensure adequate supply of basic food commodities like rice, vegetable and meat.
She, on the other hand, noted the pull of external factors remains strong.
For one, expectations for another hike in the Federal Reserve’s key rate in December remain high, she said.
These are among the factors that market players are watching out for, thus, the cautiousness on their investment decisions, she said.
Meanwhile, De Leon said they remain watchful on external developments vis-a-vis the plan to issue another US dollar-denominated bond before the end of this year.
Among other factors, the Federal Open Market Committee (FOMC) will have its meeting on November 7-8.
“We will continue to monitor the developments in the global markets and see if there would be a window of opportunity for us to be able to issue,” she said, adding that data releases in the domestic front are “crowded” this week.
Aside from the October 2018 inflation report that is scheduled to be released Tuesday, the government is also scheduled to report on the domestic economy’s third quarter gross domestic product (GPD) figure on Thursday. (PNA)
