MORE HIKES. The average rate of the seven-year Treasury bond (T-bond) rises on Tuesday (June 14, 2022), which National Treasurer Rosalia de Leon traces to expectations for additional hikes in the Bangko Sentral ng Pilipinas (BSP) and Federal Reserve's key rates. This, as inflation both in the Philippines and the US continues to accelerate on account of upticks in the prices of commodities in the international market. (Photo from BTr)
MANILA – The rate of the seven-year Treasury bond (T-bond) rose on Tuesday, thus the partial award by the Bureau of the Treasury’s (BTr) auction committee.
The average rate of the debt paper increased to 6.740 percent from 6.428 percent previously.
The BTr offered the debt paper for PHP35 billion and the auction committee awarded PHP19.551 billion. Total tenders reached PHP62.296 billion.
“Markets remain defensive with (a) slew of news both from Fed (Federal Reserve) and BSP (Bangko Sentral ng Pilipinas) to take action to fight surge in prices,” National Treasurer Rosalia de Leon told journalists in a Viber message.
De Leon said the auction committee “decided to alight rates with prevailing market rates.”
For one, the US consumer price index (CPI) for May accelerated further to 8.6 percent, the highest since 1981, after decelerating to 8.3 percent in the previous month.
This made economists and market analysts eye more aggressive hikes in the Fed rates after the total of 75 basis points increase last March and May.
The same situation is expected for the BSP after the May 2022 domestic inflation rate posted a faster rate of 5.4 percent, the second consecutive month that it rose beyond the government’s 2-4 percent target band.
BSP’s policy-making Monetary Board (MB) hiked the central bank’s key rates by 25 basis points last March, the first increase since December 2018 and after the total of 200 basis points increase in 2020 as a pandemic-related measure. (PNA)
