Market snaps up short-dated treasury bills

The Bureau of the Treasury fully awarded the P15 billion in treasury bills it offered Monday as the market snapped up the short-dated securities at mostly slightly lower yields ahead of an expected further hike in interest rates by the Bangko Sentral ng Pilipinas.

In a statement, the Treasury took note of “healthy market appetite” as it received a total of P46.4 billion in bids for the three tenors, making the auction over thrice oversubscribed.

The Treasury sold P4 billion in 91-day IOUs at an average rate of 3.29 percent; P5 billion in 182-day debt paper at 4.186 percent; and P6 billion in 364-day securities at 4.899 percent.

In the case of the benchmark 91-day treasury bill, the yield inched up from 3.261 percent last week.

But the 182- and 364-day rates declined from 4.294 percent and 4.9 percent, respectively, a week ago.

Deputy Treasurer Erwin D. Sta. Ana told reporters that “players are really playing it safe and taking a cautious stance at this stage, hence the more than three times oversubscription in the auction.”

Sta. Ana noted that the government will release the inflation number for July today, while the second-quarter gross domestic product (GDP) performance will be on Thursday, the same day that the BSP’s Monetary Board will decide on the monetary policy stance.

Economists are betting on a third straight hike in the policy rate, by as much as 50 basis points from 3.5 percent at present, following the 25-bps increases each in May and June due to higher-than-expected inflation.

Headline inflation was also expected to have hit another fresh over five-year high last month following an increase in jeepney fares as well as higher excise taxes slapped on cigarettes under the Tax Reform for Acceleration and Inclusion Law. —BEN O. DE VERA