T-bills rates further go down

The Ayuntamiento de Manila which houses the Bureau of the Treasury (From the Facebook account of the bureau)

MANILA, Philippines—T-bill rates continued to fall as the market still preferred short-dated debt while awaiting interest-rate cues from this week’s US Federal Reserve meeting.

The Bureau of the Treasury raised a total of P15 billion — P5 billion each in the benchmark 91-, 182-, and 364-day IOUs at Monday’s auction.

The rates further declined to 0.693 percent for three-month securities, 1.077 percent for six-month, and 1.41 percent for one-year.

Last week, treasury bills fetched average rates of 0.875 percent, 1.097 percent, and 1.415 percent.

This week’s yields were also below secondary market benchmarks, the Treasury said in a statement.

“The strong bias for short-term tenors was seen in the auction with a sharp reduction in rates,” National Treasurer Rosalia de Leon said.

Across the three tenors, tenders totaled P76.4 billion, making the auction over five times oversubscribed.

De Leon said the market was waiting for the US Fed’s signal of a rate liftoff, which some economists had forecast to be a total of four hikes this year starting as early as March.

The Fed’s two-day meetings and Fed Chair Jerome Powell’s upcoming press briefing will provide guidance on the forthcoming domestic borrowings in February, the auction schedules for which the Treasury will announce this week, De Leon said.

Higher interest rates in the US were expected to attract capital flows back to developed economies and leave emerging markets like the Philippines.

TSB