T-bill rates rise on inflation anxiety

Rosalia de Leon

T-bill rates inched up across-the-board on Monday due to inflation jitters, but the Bureau of the Treasury awarded all P15 billion in the short-dated debt paper that it offered.

The Treasury sold P5 billion each in the benchmark 91-, 182- and 364-day IOUs.

Average yields rose to: 1.085 percent from 1.06 percent last week for the three-month securities; 1.391 percent from 1.385 percent for the six-month; and 1.584 percent from 1.582 percent for the one-year.

Despite higher bid rates, demand remained strong and totaled P56.36 billion, making the auction oversubscribed by nearly four times.

National Treasurer Rosalia de Leon said inflation expectations pushed rates up, “but not so much, especially for the 182- and 364-day” tenors.

Majority of economists polled by the Inquirer last week projected headline inflation in September may have reached 5 percent or higher.

In an email, Deutsche Bank chief Asia economist Michael Spencer said they expected a similar rate of 4.9 percent year-on-year last month just like in August, which was a 32-month high and above the Bangko Sentral ng Pilipinas’ (BSP) 2 to 4 percent target range.

Spencer pointed to a temporary rise in vegetable prices plus the low-base effect for other items in the consumer price index basket.

“We expect the inflation rate to fall back below 4 percent in the first quarter of 2022. Grounds for concern about inflation in 2022 rest mainly [upon] international commodity prices rather than domestic price pressures. We expect inflation to remain between 3 percent and 4 percent next year but we also expect the BSP to hike rates three times, starting in the second quarter,” Spencer said.

The government’s September inflation report will be out today, Oct. 5. INQ