T-bill rates continue to rise

Treasury bill bid rates further climbed across the board for the fourth consecutive week Monday on expectations of stimulus-propelled economic recovery in the United States while domestic inflation soared.

The Bureau of the Treasury awarded all the P20 billion in short-dated debt paper as demand remained strong with tenders totaling P42.4 billion across the three tenors, or twice the offering.

The Treasury sold P5 billion in the benchmark 91-day bills at an average rate of 1.232 percent, up from 1.139 percent last week.

It also awarded P5 billion in 182-day securities at 1.527 percent, up from 1.316 percent previously.

The P10 billion in 364-day IOUs fetched an annual rate of 1.99 percent, up from 1.852 percent.

National Treasurer Rosalia de Leon attributed the rising rates to the Bangko Sentral ng Pilipinas’ (BSP) expectations that elevated headline inflation would peak in the second quarter.

“Domestic rates also trended up as US treasuries adjusted upwards with good prospects of strong rebound” due to the Biden administration’s $1.9-trillion stimulus package, De Leon said.

“Supply-side constraints also pushed rates up as we also see oil prices increasing,” she added.

In a note to clients, Metrobank Research said local securities were expected to “still be susceptible to US treasury yields as long as there are no new catalysts” even as seven-year bonds maturing by this month’s end could stabilize the yield curve. INQ