T-bill rates increase anew

Interest rates asked by investors for Treasury bills (T-bills) maturing in 91, 182 and 364 days rose across-the-board amid calls for another central bank policy rate hike following the continued increase in consumer prices.

During yesterday’s auction, the Bureau of the Treasury (BTr) partially awarded 91-day T-bills to temper down the rates asked by the market.

As a result, the securities fetched an average rate of 3.549 percent, 32.4 basis points higher than the 3.225 percent recorded last week. Only P2.47 billion of the P4 billion offering was accepted despite the oversubscription, with total tenders reaching P5.78 billion.

The auction committee made a full award of P5 billion worth for the 182day debt papers, which fetched an average rate of

4.353 percent. The rate was 25.2 basis points higher than the previous auction’s level of 4.101 percent.

Healthy demand met the securities as bids amounted to P8.075 billion.

A total of P6 billion worth of one-year T-bills were likewise sold by the BTr. The securities fetched an average rate of 5.137 percent, 23.8 basis points higher than the 4.899 percent posted last week.

Total tenders reached P8.051 billion, 34 percent higher than the offer volume.

With the decision to make a full awards, the auction committee was able to raise P13.5 billion of the P15 billion borrowing program for the day.

National Treasurer Rosalia De Leon said interest rates rose across all tenors as the market is now anticipating another rate hike from the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) in its next policy meeting.

“They’re already saying that BSP should be hiking by another 50 basis points. I guess they would also want to see BSP anchor inflationary expectations,” De Leon said.

Inflation hit a fresh nine-year high of 6.4 percent in August, bringing the yearto-date headline inflation to 4.8 percent. This is higher than the government’s target range of two to four percent.

The inflation figure for August is also higher than the 2.6 percent registered in the same month last year, and the 5.7 percent posted in July.