91-day T-bill rate rises ahead of monetary policy review

Yields on Treasury bills (T-bills) were mixed on Monday’s auction as some securities dealers sought higher rates ahead of the next Monetary Board policy review, while awaiting the release of July inflation data.

The Bureau of the Treasury was able to borrow its target amount of P20 billion via T-bills as the total bids reached P47.3 billion, exceeding the original size of issuance by more than twice.

READ: T-bills rates rise ahead of August MB meet

The 91-day T-bills averaged 5.828 percent, more expensive than the 5.779 percent rate at the previous auction. Likewise, the yield on the 181-day T-bill increased to 6.062 percent from 6.014 percent previously.

On the other hand, rates for the 364-day debt paper went down to 6.074 percent from 6.108 percent.

Inflation data awaited

“Most of the T-bill average auction yields were again slightly higher week-on-week a day before the latest inflation [rate] that is expected to pick up largely due to the effects of Typhoon Carina,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a message.

Latest government data showed that the supertyphoon and the intensified monsoon rains in late July had destroyed P1.21 billion worth of farm products, with rice and corn suffering the most significant losses.

Ricafort also noted that creditors continued to lock in higher rates ahead of the widely expected rate cut this month.

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. said earlier that the Monetary Board may cut rates by 25 basis points (bps) this month and another 25 bps before the end of the year—possibly even ahead of the US Federal Reserve.

The Philippine Statistics Authority is set to release the July inflation rate on Tuesday (Aug. 6). INQ