T-bill rates drop as lenders swarm auction

Bureau of the Treasury (From the Facebook account of the bureau)

MANILA  -The average yields on short-term borrowings of the government dropped across the board and remained below secondary market rates, amid firmer lenders’ appetite for Treasury bills.

The national government again raised P15 billion as planned with the full-award of T-bills at the latest weekly auction held Sept. 18.

The average rate on the benchmark 91-day Treasury bills decreased by 2.3 basis points (bps) to 5.552 percent from 5.575 percent in the previous weekly auction.

Also, the average yield on the 182-day T-bills slipped to 5.939 percent from 5.96 percent.

Meanwhile, the average rate on the 364-day T-bills dropped by 11.7 bps to 6.073 percent from 6.19 percent.

“The auction was 3.7 times oversubscribed, attracting P55.7 billion in total tenders,” the Bureau of the Treasury said in a statement.

Likewise, at the Bloomberg Valuation Service (BVAL), the yield on the three-month bill was 7.1 bps higher at 5.623 percent.

The yield on the six-month bill was 2.5 bps higher at 5.964 percent. The average rate for the 12-month bill was 9.1 bps higher at 6.164 percent.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the continued decline in T-bill auction yields happened amid market expectations that the US Federal Reserve and the Bangko Sentral ng Pilipinas will keep their respective policy rates unchanged when they meet later this week.

Ricafort said T-bill yields were also subsiding as the implementation of price ceilings on milled rice pushed on through its second week, as part of efforts to curb inflationary pressures.

The market is also looking at the possible temporary reduction of the rice import tariffs from the current 35 percent to zero or a maximum of 10 percent.