Treasury bill rates rise

Bureau of the Treasury

MANILA, Philippines — Rates on short-dated securities snapped four straight weeks of decline during Monday’s sale of Treasury bills (T-bills) amid hawkish signals from the US Federal Reserve.

Auction results showed the Bureau of the Treasury (BTr) was still able to fully raise its target amount of P15 billion via T-bills sale.

The offer attracted total demand amounting to P38.3 billion, 2.5 times larger than the original size of the issuance.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said T-bill rates “corrected slightly higher” after some Fed officials hinted at a delayed rate cut, which may have an influence on the Bangko Sentral ng Pilipinas’ own easing moves.

“Treasury bill average auction yields corrected slightly higher after slightly declining for four straight weeks, after consistent higher-for-longer signals from most officials and from the Fed minutes recently that reduced the odds of a rate cut,” Ricafort said in a commentary sent to journalists.

READ: Less hawkish central bank tempers T-bill rates

According to the BTr, the 91-day T-bill fetched an average rate of 5.719 percent, more expensive than 5.712 percent in the previous auction. The yield on the 182-day debt notes stood at 5.886 percent, higher than 5.864 percent previously.

The 364-day T-bill fetched a rate of 6.043 percent, up from the previous auction’s 6.007 percent.

The Marcos administration plans to borrow P585 billion from local creditors in the second quarter of 2024—the same as the financing program in the first quarter. Under the plan, the government is targeting to raise P195 billion via T-bills and P390 billion via Treasury bonds.

Overall, the Department of Finance had announced a bigger borrowing plan for this year at P2.57 trillion—from the old program of P2.46 trillion—as the government raises funds to plug a bigger-than-previously-expected budget hole of P1.5 trillion. INQ