T-bill rates up across the board

MANILA, Philippines — The government ended yesterday four consecutive weeks of full award for short-term securities after rates increased across the board ahead of the monetary policy decision of the US Federal Reserve.

The Bureau of the Treasury made a partial award of P13.608 billion out of P15 billion in offer.

This effectively snapped four consecutive weeks of full award for T-bills.

Similarly, demand slipped for the third straight week, declining by 27 percent to P20.049 billion.

Demand also hit the lowest level in seven weeks or since the P17.553 billion on April 24.

Investors continue to await the US Fed move, which is expected to pause in its tightening cycle over the next two days.

The Bangko Sentral ng Pilipinas (BSP) is expected to do the same and keep its pause again during its meeting next week.

Last month, the BSP left rates unchanged at 6.25 percent after its consistent monetary aggressiveness for a year.

Meanwhile, rates went up across the board for the 91, 182 and 364-day tenors.

Rates for the 91-day T-bills went up by 5.9 basis points to 5.922 percent from the secondary rate of 5.863 percent and above last week’s 5.827 percent.

As such, the Treasury only awarded P3.608 billion out of the P5 billion on offer for the three-month T-bills.

Likewise, the 182-day short-dated debt papers saw rates go up by 7.7 basis points to 5.978 percent from the reference rate of 5.901 percent. This was also higher from last auction’s 5.891 percent.

On the other hand, rates averaged 6.062 percent for the 364-day T-bills, 11.4 basis points above the secondary rate and up from last week’s auction rate of 5.98 percent.

Still, the Treasury awarded P5 billion each for the six-month and one-year debt papers.

Overall, demand for the short-term securities dropped by 27 percent to P20.049 billion from last week’s P27.653 billion. The auction was oversubscribed by 1.34 times.

Bids went down across the board to P4.518 billion, P7.72 billion and P7.811 billion for the three, six and 12-month tenors, respectively.

For this month, the Treasury targets to borrow P185 billion from the local debt market.

Of this, P60 billion is expected to be raised from short-term T-bills. It has so far raised P28.608 billion.