EXPECTATIONS FOR HIKE. The Bureau of the Treasury (BTr) rejects all bids for the Treasury bills (T-bills) on Monday (May 16, 2022) after investors asked for high rates. National Treasurer Rosalia de Leon attributed this development to expectations for a hike in the Bangko Sentral ng Pilipinas' (BSP) key rates on Thursday. (File photo)
MANILA – Bids for Treasury bills (T-bills) were rejected across the board on Monday after investors asked for a high yield ahead of the policy meeting of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board (MB).
Had the auction committee awarded the debt papers, the average rate of the 91-day T-bill would have risen to 1.759 percent, the 182-day to 2.215 percent, and the 364-day to 2.828 percent.
These were at 1.531 percent, 2.165 percent, and 2.329 percent for the three-month, six-month, and one-year papers during the auction last May 10.
BTr offered all tenors for PHP5 billion, and most were oversubscribed.
Total tenders for the 91-day T-bill reached PHP13.304 billion while it amounted to PHP7.327 billion for the 182-day.
On the other hand, bids for the 364-day T-bill amounted to PHP2.9 billion.
“Market remains defensive and (is) bracing for a possible rate hike by the MB with stronger-than-expected first-quarter GDP (gross domestic product) growth,” National Treasurer Rosalia de Leon told journalists in a Viber message.
Last week, the Philippine Statistics Authority reported the higher-than-expected 8.3-percent growth of the domestic economy in the first three months of the year from the previous quarter’s 7.8 percent.
With this, some analysts forecast Philippine monetary authorities to start hiking the central bank’s key rates, which have been cut by a total of 200 basis points to a record-low 2 percent for the overnight reverse repurchase (RRP) rate in 2020 to encourage lending and ensure that economic activities will remain robust despite the pandemic.
This, as inflation continues to accelerate, with the April 2022 figure rising to 4.9 percent from 4 percent in the previous month.
The BSP’s MB will have its third rate setting meeting for the year on Thursday. (PNA)
