MANILA -- The rates of Philippine Treasury bills (T-bills) rose across-the-board Monday as investors continue to expect a sustained deceleration in domestic inflation while drawing added confidence from the US Fed's statement that there is no rush to hike rates again.
Average rate of the benchmark 91-day paper as well as the 182-day T-bill went up by 6.6 basis points while rate of the 364-day rose 5.9 basis points.
The three-month debt instrument fetched an average rate of 5.550 percent from 5.484 percent during the auction last February 4.
It was offered for PHP6 billion and received PHP7.344 billion worth of tenders. The auction committee made a full award.
The rate of the six-month paper averaged at 5.933 percent from the previous auction’s 5.867 percent.
Investors submitted tenders amounting to PHP11.569 billion, almost double the PHP6-billion offer. The auction committee also made a full award for this tenor.
The one-year paper’s average rate inched up to 5.983 percent from 5.924 percent last February 4.
It was offered for PHP8 billion and attracted bids amounting to PHP11.403 billion. This tenor was likewise awarded in full.
National Treasurer Rosalia De Leon cited strong demand as the main factor for the full award and upticks in the T-bills’ interest rates during the day.
“We hope that this would continue, this kind of auction, given that there are dovish remarks coming from the Fed. And of course, the BSP put on hold their rates during their last policy meeting last Thursday,” she told journalists after the auction.
For one, BSP’s policy-making Monetary Board (BSP) kept key rates steady on expectations that domestic inflation will go back to the 2 to 4 percent target band as early as March this year.
Big jumps in the inflation rate last year, which peaked at 6.7 percent in September and October, is the reason for the 175 basis point cumulative increase in the BSP's rates last year.
Although inflation has started to slow down, with the January 2019 figure at a milder 4.4 percent, monetary officials discounted a cut in the BSP’s interest rates, at least for the meantime.
Another reason for the hikes in the T-bill rates Monday is the news that the Bureau of the Treasury (BTr) is planning to issue Retail Treasury Bond (RTB) this year, de Leon said, citing PHP70-billion worth of maturing debt papers on February 19.
RTBs are intended for small investors since minimum placement is PHP5,000.
The last time BTR came out with this debt instrument was in June 2018, wherein about PHP121.765 billion worth of three-year paper was issued. (PNA)
