T-bill rates ease across all tenors as banks swamp auction
MANILA -Interest rates on short-term government securities decreased across the board as lenders again swamped the weekly auction of Treasury bills following a pause on the local central bank’s policy rate hikes.
For the second week in a row, the national government raised P15 billion as planned from respective P5-billion offer of T-bills.
Full awards achieved in these two latest T-bill auctions followed 12 consecution auctions when the government could only make partial awards.
On Monday’s bidding, the auction committee led by the Bureau of the Treasury (BTr) noted that all resulting average rates were lower than those in the previous auction as well as the prevailing secondary market rates.
The average rate on the benchmark 91-day T-bills decreased by 9.7 basis points (bps) to 5.777 percent from 5.874 percent last week.
For the 182-day T-bills, average yield was 9.3 bps lower at 5.898 compared with the previous 5.991 percent.
Also, the average rate for the 364-day T-bills went down by 8.3 bps to 5.945 percent from 6.028 percent.
At the secondary market, the rate for the three-month debt paper was 4.6 bps higher at 5.823 percent.
Also, the rates for the six-month debt paper was 1.6 bps higher at 5.906 percent, and for the yearlong bill, 0.5 bp higher at 5.956 percent.
“The auction was four times oversubscribed with total bids reaching P60.7 billion,” the BTr said.
The 91-day T-bill alone was more twice overbooked, with lenders ready to provide a total of P14.06 billion. Tenders for the 182-day bill were more than four times the offer at P20.08 billion and the 364-day bill was more than five times oversubscribed with P26.528 billion.
According to the economic research team at Bank of the Philippine Islands, monetary authorities were still bent on fighting inflation even with a pause on rate hikes.
Considering that, BPI thinks that short-term yields may stay elevated.
“However, downward pressure on long term yields is expected considering the increasing possibility of a recession in major economies, uncertainties in the global banking sector and the anticipated decline in inflation,” the bank added.
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