Rosalia de Leon
The Bureau of the Treasury on Monday awarded all of the P15 billion in treasury bills it auctioned off, even as rates went sideways on expectations of higher inflation in August.
The Treasury sold P5 billion each in the benchmark 91-, 182-, and 364-day debt paper. In a statement, the Treasury said the yields were below secondary market levels.
The average rate for three-month IOUs inched up to 1.078 percent from 1.077 percent last week.
Six-month treasury bills’ yield stayed at 1.405 percent.
The annual rate for one-year securities, meanwhile, declined to 1.609 percent from 1.616 percent previously.
Across the three tenors, bids totaled P56.9 billion or nearly four times the offering.
National Treasurer Rosalia de Leon said there was “good participation” among investors during Monday’s auction such that rates were “relatively unchanged” despite August inflation being projected to breach the Bangko Sentral ng Pilipinas’ 2 to 4 percent target range. Last month’s inflation rate will be out on Sept. 7.
In a report Monday, Citi’s economist for the Philippines Nalin Chutchotitham said she expects August’s headline inflation at 4.3 percent. Chutchotitham said the rate of increase in prices of basic commodities would likely stay above 4 percent up to October due to base effects, before easing to the 3.5-percent level by November. She sees the inflation rate averaging an above-target 4.2 percent for 2021.
De Leon also attributed the T-bill rates to the market taking signals from US Federal Reserve chair Jerome Powell’s recent pronouncements on the Fed’s forthcoming taper.