MANILA – The Bureau of the Treasury (BTr) on Tuesday fully awarded bids for Treasury bills (T-bills).
The 91-, 182-, and 364-day T-bills fetched average rates of 4.753 percent, 5.181 percent, and 5.727 percent, respectively – all significantly lower than previous auction and prevailing secondary market rates.
On Nov. 13, the 91-, 182-, and 364-day average rates were at 6.123 percent, 6.513 percent, and 6.560 percent respectively.
The auction attracted PHP72.2 billion in total tenders.
The BTr raised the full program of PHP10 billion for the auction.
"Treasury bill average auction yield sharply declined and are now way below the comparable PHP BVAL (Bloomberg Valuation Service) yields and way below the key local policy rate of 6.5 percent after the recent decline in global crude oil prices to among 4-month lows," Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a comment.
Ricafort said the lower auction yield was also after the easing trend in U.S. and local interest rates, amid expectations of a Fed rate pause for this year and possible Fed rate cuts in 2024 as priced by the markets, and as U.S. and local inflation rates have been moving closer to central bank targets.
"Sharply lower T-bill auction yields would effectively reduce the borrowing costs of the government and other private sector borrowers," he said. (PNA)