T-bill rates mixed as demand picks up

MANILA, Philippines — Rates for the government’s short-term securities were mixed, with demand picking up after a month of declines amid a hawkish US Federal Reserve.

The Bureau of the Treasury yesterday made a partial award of P14.417 billion in T-bills, just shy of the P15 billion in offer.

This marked the fifth straight week of partial award for T-bills, with the amount raised increasing from last week.

Demand, on the other hand, broke the six straight weeks of decline as it rose to P27.56 billion.

This is the highest in a little over a month or since the P27.653 billion in June 5.

Yields were expected to be on an upward trend this week as the US Fed has signaled another rate increase this month just after taking a pause in June.

On the domestic front, the Bangko Sentral ng Pilipinas is not due for another policy meeting until August.

Meanwhile, rates yesterday were mixed after declining for the 91-day offer, but moving up for the 182 and 364-day tenors.

Rates for the 91-day T-bills slipped by 13.6 basis points to 5.973 percent from the secondary rate of 6.109 percent and lower from last week’s 6.15 percent.

As such, the Treasury fully awarded P5 billion for the three-month T-bills.

On the other hand, the 182-day short-dated debt papers saw rates go up by 7.2 basis points to 6.266 percent, same as last week’s level, but above the reference rate of 6.194 percent.

Nonetheless, the Treasury still awarded the entire P5 billion despite higher rates.

Rates also averaged 6.339 percent for the 364-day T-bills, 5.6 basis points above the secondary rate and up from last week’s auction rate of 6.286 percent.

With this, only P4.417 billion was raised out of the P5 billion target.

Overall demand for the short-term securities surged by nearly 60 percent to P27.56 billion. The auction was oversubscribed by 1.84 times.

Bids went up across the board to P11.128 billion, P8.328 billion, and P8.104 billion for the three, six, and 12 months securities.

For July alone, the Treasury targets to borrow P180 billion from the local debt market.

Of this, P60 billion is expected to be raised from short-term T-bills. It has so far borrowed P23.636 billion.