Gov’t moves to cap rising yields as banks search for inflation shield

The Bureau of the Treasury on Monday rejected bids for the 91-day T-bills while partially awarding the two longer tenors as bid rates rose amid market concerns on high inflation.

Tenders for the P4 billion in 91-day treasury bills offered reached P5.16 billion, making the auction oversubscribed.

However, the Treasury rejected all bids as the average rate sought shot up to 5.067 percent.

For the 182-day T-bills, the Treasury awarded only P3.652 billion out of the P5-billion offering even as investors tendered P6.752 billion.

The six-month debt paper were sold at a 5.894-percent yield.

As for the 364-day treasury bills, P3.349 billion were accepted out of the P6-billion offering. The debt paper was undersubscribed, with bids amounting to P5.949 billion

The one-year government securities were capped at an annual rate of 6.256 percent.

In total, the Treasury raised P7 billion out of the P15-billion total offering, even as tenders amounted P17.9 billion.

“Based on feedback from the surveys that we did and the Bangko Sentral ng Pilipinas’ [survey of] GSEDs (government securities eligible dealers), they are still factoring in inflation. There’s also some consideration on the rate-hike trajectory of the Fed, [which is] expected to hike again once this year and three times next year, ” Deputy Treasurer Erwin D. Sta. Ana told reporters after the auction.