MANILA -- Philippine Treasury bills (T-bills) continued to reflect rising interest rates, which according to National Treasurer Rosalia De Leon, also shows that investors are locking in on rates.
Bureau of the Treasury’s (BTr) auction committee fully awarded all three tenors this week, especially since rate of the one-year paper declined.
Rate of the 91-day T-bill rose to 5.394 percent from 5.295 percent during the auction last November 19. The auction committee rejected bids for this tenor during the auction last November 26.
The auction committee made a full award of PHP4 billion after tenders reached PHP6.805 billion.
Average rate of the 182-day paper improved to 6.305 percent from 6.294 percent during the auction last week.
It was offered for PHP5 billion and was fully awarded after bids totaled to PHP12.998 billion.
Rate of the 364 T-bill averaged at 6.507 percent, down from 6.550 percent in the previous auction.
Investors submitted a total of PHP15.780 billion, higher than the PHP6 billion offering and last week’s PHP9.945 billion tenders. The auction committee also fully awarded this tenor.
De Leon said members of the auction committee were “very pleased with the auction results particularly on 182- and 364-day.”
“Price pressures have been going down,” she said, citing that this is the reason why investors are locking on rates.
With inflation declining, de Leon said both the Bangko Sentral ng Pilipinas’ (BPS) policy-making Monetary Board (MB) and the Federal Reserve’s Federal Open Market Committee (FOMC) have leeway for steady policy stance.
“Given that price pressures have receded there’s a case already for the Monetary Board to take a pause in monetary tightening,” she said.
Citing remarks by US Fed Chair Jerome Powell in a recent speech that Fed rates might already be close to neutral, de Leon said, “there may be a case also for the Fed to take a pause in the new year.”
Additional factors that call for a steady policy stance for both central banks, are the slowing global growth as well as trade tensions, she added. (PNA)
