KEY RATE RISE. Treasury bills rate registers a mixed path on Monday (July 11, 2022) which National Treasurer Rosalia de Leon attributes partly to possible future adjustments in the Bangko Sentral ng Pilipinas' (BSP) key rates. The BSP is expected to increase its key rates further as inflation rate is expected to accelerate further in the coming months. (Photo from BTr).
MANILA – The rate of Treasury bills (T-bills) ended mixed on Monday which National Treasurer Rosalia de Leon traced partly to the path of the central bank’s key rates.
The average rate of the 91-day T-bill declined to 1.876 percent but those of 182-day rose to 2.907 percent and the 364-day to 2.981 percent.
These were at 1.908 percent, 2.608 percent, and 2.811 percent for the three-month, six-month, and one-year papers during the auction last July 4.
The Bureau of the Treasury (BTr) offered all tenors for PHP5 billion and all were oversubscribed at PHP24.563 billion for the three-month, PHP7.05 billion for the six-month, and PHP5.11 billion for the one-year paper.
The 91-day paper was fully awarded but the auction committee only accepted PHP4.1 billion worth of six-month paper and PHP4.06 billion of one-year paper.
“Award is based on BTr’s reasonableness test including guidance from BSP (Bangko Sentral ng Pilipinas) on path of rate hike,” de Leon told journalists in a Viber message.
This, as the BSP, along with other central banks, is expected to raise key policy rates further as the inflation rate continues to accelerate.
The BSP has increased its key rates by a total of 50 basis points --25 basis points each last May and June.
It is widely expected to announce more aggressive hikes after BSP Governor Felipe Medalla said he is open to the possibility of as much as 50 basis points rate increase in August if inflation continues to post big increases.
The rate of price increases rose to 6.1 percent last June, the third consecutive month, breached the government’s 2-4 percent target range due mainly to oil price upticks in the international market.
De Leon said the last time the one-year T-bill rate surpassed the 3-percent interest rate level was in April 2022 when it averaged 3.371 percent.
This, after inflation rate at that time declined to 1.8 percent from 2.2 percent in March 2020. (PNA)
