Mixed results mark T-bills auction

By Anna Leah Gonzales

October 2, 2023, 6:58 pm

MANILA – The Bureau of the Treasury (BTr) on Monday fully awarded bids for the 91- and 182-day Treasury bills (T-bills) and partially awarded the 364-day security.

The 91- and 182-day T-bills fetched an average rate of 5.698 percent and 6.023 percent, respectively.

The 364-day tenor, meanwhile, was capped at 6.215 percent.

The auction was 1.8 times oversubscribed, with total tenders reaching PHP27.6 billion.

The BTr raised PHP12.9 billion of the PHP15 billion total offering.

In a comment, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said T-bills auction yields were again higher for the second straight week.

Last week, the average rate of 91-, 182- and 364-day tenor settled at 5.595 percent, 5.968 percent and 6.119 percent, respectively.

Ricafort said this is ahead of the latest local inflation data on Thursday, which he said can again pick up due to higher rice and oil prices.

"T-bill auction yields also went up recently due to hawkish signals from local monetary officials on possible local policy rate hike on or before the November 16, 2023 rate-setting meeting and could remain at similar levels in the first half of 2024," he said.

He said external factors include the higher US Treasury bond yields, with the 10-year benchmark already at 4.61 percent, the recent hawkish Federal Reserve signals and a possible 0.25 percentage points Fed rate hike on the next rate-setting meeting on Nov. 1 that could be matched locally to maintain healthy interest rate differentials. (PNA)