T-bill rates rise on hawkish bets

MANILA  -The yield on short-term government securities went up across the board on Monday amid hawkish central bank signals, forcing the government to make partial awards to minimize the increase.

The auction committee led by the Bureau of the Treasury raised only P8.8 billion out of a total of P15 billion on offer.

The average rate on the benchmark 91-day Treasury bills (T-bills) increased by 10.7 basis points (bps) to 6.029 percent from 5.922 percent a week earlier.

The committee awarded P3.255 billion out of the P5 billion-offer of three-month T-bills. Had the government gone with a full award, the 91-day T-bill rate would have jumped to 6.098 percent.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said the T-bill auction results had been influenced by a statement from the United States Federal Reserve about possible two more federal fund rate hikes in the remainder of this year.

Fed leaves rates unchanged, sees two small hikes by end of 2023

At the same time, there is market expectation of a resumption of US and Bangko Sentral ng Pilipinas rate hikes next month.

“The market recently priced in a possible 0.25-percentage US Fed rate hike on July 26, that could be matched locally,” Ricafort said.

The new average yield for the six-month bills was 10.3 bps higher at 6.081 compared with the previous 5.978 percent.

The average rate for the yearlong bills went up by 10.4 bps to 6.166 percent from 6.062 percent.

If full awards were made, the rates would have respectively increased by 15.4 bps to 6.132 percent, and 21.8 bps to 6.28 percent.“The auction was 1.2 times oversubscribed, attracting P18.6 billion in total tenders,” the committee said in a statement.

Similarly, average yields were higher across the board compared with prevailing rates at the secondary market.

T-bill rates rise; gov’t raises P15B

At the Bloomberg Valuation Service (BVAL) , the average for the 91-day T-bills was lower by 13.5 bps at 5.894 percent Also, the average for the six-month bills was 5.1 bps lower while that for the yearlong bills was 12 bps lower.

BVAL rate for the 182-day paper was pegged at 5.978 percent and 364-day paper at 6.046 percent. INQ