T-bill rates still inching up; 91-day yield at 1.336%

Lingering inflation worries jacked up treasury bill rates across the board anew even as the Bureau of the Treasury sold all P20 billion it offered on Monday.

The P5 billion in the benchmark 91-day bills fetched an average rate of 1.336 percent, up from 1.232 percent last week.

The rate for the P5 billion in 182-day debt paper also rose to 1.718 percent from 1.527 percent.

As for the 364-day IOUs, the annual rate inched up to 1.997 percent from 1.99 percent during the previous auction.

”Rates continue to creep with lingering concerns on higher inflation,” National Treasurer Rosalia de Leon said.

Across the three tenors, bids totaled P64 billion, making the auction thrice oversubscribed.

The higher rates did not stop the Treasury from offering another P5 billion in one-year securities to the 11 government securities eligible dealers through its tap facility.

In a report on Monday, Deutsche Bank Research said that the Philippines has the highest inflation rate in Asia but, as was the case in China and India, it was mostly because of food prices.

Headline inflation averaged 4.5 percent during the first two months of 2021, already above the government’s 2 to 4 percent target range.

“African swine fever has made its way to the Philippines, pushing pork prices up… Rising fuel prices will add to the pressure, pushing inflation up 5.5 percent year-on-year in April and May; even core inflation is likely to exceed 4 percent briefly. By yearend, we expect inflation to have fallen back to near the midpoint of the target band,” Deutsche Bank chief economist Michael Spencer said.

Spencer said soaring inflation, even if temporarily, compounded difficulties for Philippine households still subject to social distancing restrictions and elevated unemployment.

Due to base effects plus expectations of a rebound in exports, Spencer projected gross domestic product to grow by 8.3 percent this year. —Ben O. de Vera

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