BTr sells P15-B T-bills as yields begin to stabilize

The Bureau of the Treasury on Monday sold all P15 billion in T-bills it offered amid plateauing rates.

The Treasury awarded P4 billion of the benchmark 91-day debt paper at an average rate of 3.261 percent, up just 4.2 basis points (bps) from 3.219 percent last week.

Also, P5 billion in 182-day treasury bills were issued at 4.294 percent, up only 5.9 bps from 4.235 percent during the previous auction.

The P6 billion in 364-day IOUs, meanwhile, were sold at an annual rate of 4.9 percent, a little movement of 9.1 bps from 4.809 percent a week ago.

In a statement, the Treasury noted of a “healthy market appetite,” as tenders for the three tenors totaled P35.816 billion, making the auction more than twice oversubscribed.

Bids for the 92-day reached P9.585 billion; for the 182-day, P13.054 billion; and for the 364-day, P13.177 billion.

National Treasurer Rosalia V. de Leon told reporters the Treasury expected the market to seek “incremental” yields after the Bangko Sentral ng Pilipinas vowed “strong response” to the higher-than-expected inflation rate.

BSP Governor Nestor A. Espenilla Jr. had said the policy making Monetary Board was “considering strong follow-through monetary adjustment” when it meets to decide on the interest rate policy on Aug. 9.

The BSP already raised twice the key policy rate, which is now at 3.5 percent, after headline inflation hit an over five-year high of 5.2 percent last month and averaged 4.3 percent in the first half, already above the government’s full-year target range of 2-4 percent.

De Leon added the market was also expecting a sustained US economic growth, spurred by the US Federal Reserve with its continuing tightening cycle.

De Leon nonetheless pointed out the yield increases were no longer comparable to previous auctions.

“They’re at least 5-10 bps unlike before when you have seen double digit in the range of 30 bps. So I think, hopefully, this is the start also of the plateauing of the rates,” de Leon said.