T-bill rates continue to soar

The government made a partial award for short-dated Treasury bills (T-bills) after rates reached an excessive level even amid declining oil prices.

Rates for government securities continued to increase yesterday, reaching a high of 3.5 percent as investors continued to demand higher yields.

This prompted the Bureau of the Treasury to only partially award P13.75 billion of the P15 billion in T-bills on offer.

In particular, offers for the 364day T-bills averaged at 3.356 percent, rising by 21.9 basis points. It even reached a high of 3.5 percent. Rates for the one-year tenor also went up week-on-week.

The Treasury only awarded P3.75 billion of the P5 billion on offer for the 364-day T-bills.

National Treasurer Rosalia de Leon said the 3.5 percent rate is excessive.

“Awarding beyond 3.5 percent is an excessive cushion against inflation as we saw recent drops in oil prices,” De Leon said.

Rates for the 91-day T-bills jumped by 13.7 basis points to 2.273 percent from the market pricing of 2.136 percent. However, this is lower from last week’s 2.323 percent rate.

Yields for the 182-day short-dated debt papers likewise soared by 40.6 basis points to 3.143 percent. On a weekly basis, this is up from 3.083 percent.

Oil companies have been slashing prices of diesel for the fourth straight week now. Prices of gasoline and kerosene are also expected to go down this week.

De Leon said the market was waiting for President Marcos’ State of the Nation Address (SONA).

“Everyone is awaiting the President’s SONA message, especially the administration’s priorities and initiatives to curb inflation rise,” she said.

Economists said inflation remains a concern, hitting an almost four-year high of 6.1 percent in June with further upticks still seen in the coming months.

The Treasury managed to raise P5 billion each from the 91-day and 182-day T-bills.