T-bill rates mostly rise ahead of inflation data

INQUIRER FILE PHOTO

Yields on Treasury bills (T-bills) were mostly higher for the ninth week on Monday, as the market braced for an uptick in the November inflation rate, which will be announced later this week.

But that did not stop the Bureau of the Treasury (BTr) from raising its target amount of T-bills. Auction results showed the state was able to borrow P15 billion from local creditors, as planned.

The BTr said total demand for the T-bills had reached P57.8 billion, exceeding the original size of the offering by 3.9 times.

READ: T-bill rates up for 8th week

Average yield on the 91-day debt papers stood at 5.630 percent, lower than the 5.647 percent recorded in last week’s auction.

But the 182-day T-bills fetched an average rate of 5.905 percent, more expensive than the 5.882 percent demanded by investors previously. Likewise, creditors demanded an average rate of 5.937 percent for the 364-day debt securities, up from 5.905 percent before.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said expectations of a higher November inflation following the typhoon onslaught and the peso’s dip to record-low 59:$1 had prompted creditors to ask for higher rates, which the government accepted.

“The Treasury bill average auction yields were mostly slightly higher for the ninth straight week, ahead of the latest local inflation data that is expected to slightly pick up,” Ricafort said.

An Inquirer poll of eight economists yielded an average forecast of 2.5 percent for November, which, if realized, would be slightly faster than the 2.3 percent recorded in October.

But despite the potential increase, all analysts shared the same view that inflation last month would stay within the 2 to 4 percent target range of the Bangko Sentral ng Pilipinas (BSP). The BSP expects the November reading to settle between 2.2 and 3 percent.

The Philippine Statistics Authority will release the November inflation data on Dec. 5.

For this year, the Marcos administration had set a P2.57-trillion borrowing program to bridge a budget deficit that is capped at P1.5 trillion, or equivalent to 5.6 percent of gross domestic product.

Figures from the Treasury showed the 10-month fiscal gap at P963.9 billion, accounting for 64.94 percent of the deficit limit of the Marcos administration, which is aspiring for an upgrade to “A” credit rating in the coming years.