T-bill rates up on inflation jitters

The Bureau of the Treasury on Tuesday raised P15 billion from the sale of short-dated T-bills even as rates climbed across-the-board on expectations of a still elevated inflation last month.

The Treasury awarded all P5 billion each in the benchmark 91-, 182- and 364-day debt paper it auctioned off.

The three-month IOUs fetched an average rate of 1.13 percent, up from 1.119 percent last week. The yield on six-month securities rose to 1.395 percent from 1.387 percent previously, while the annual rate for the one-year treasury bills jumped to 1.613 percent from 1.606 percent.

National Treasurer Rosalia de Leon noted that the rates rose by about 1 basis point or less, while the Treasury said in a statement that the T-bills were sold below secondary market trading levels.

De Leon said investors made their bids while waiting for the October inflation print which would be out on Friday, as well as the anticipated announcement of the US Federal Reserve on its “tapering” plan, or reduction in the purchases of assets like bonds amid improving economic prospects in the United States.

The majority of economists polled by the Inquirer last week projected headline inflation in October to be lower than September’s 4.8 percent, although still above the Bangko Sentral ng Pilipinas’ 2 to 4 percent target range.

DBS Group Research economist Chua Han Teng said he expected headline inflation to have slightly eased to 4.7 percent last month as “slower food price growth was likely met with upside energy price pressures, with core inflation remaining steady.”

Maybank Investment Bank Berhad economist Zamros Dzulkafli projected a higher 4.9 percent year-on-year rate of increase in prices of basic commodities last October, warning that “elevated global crude oil prices and the recent typhoon ‘Maring’ were expected to keep upward pressure on inflation in the Philippines in the coming months.”

Despite investors’ inflation jitters, Monday’s T-bill auction was almost thrice oversubscribed, with a total of P41.8 billion in bids across the three tenors. INQ