T-bill rates rise ahead of BSP policy meeting

INQUIRER FILE PHOTO

The government was able to raise its target amount of short-dated debts during its last sale of Treasury bills (T-bills) for the year despite higher rates sought by investors, who are now waiting for the next move of the Bangko Sentral ng Pilipinas (BSP).

Auction results on Monday showed the Bureau of the Treasury (BTr) sold P15 billion in T-bills, as planned.

The Treasury said the debt papers were met with strong demand, attracting P46.7 billion in total tenders that exceeded the original size of the offer by 3.1 times.

But that did not prevent the rates from going up week-on-week. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the market was now anticipating the next decision of the BSP, which would hold its last rate-setting meeting for this year on Dec. 19.

READ: T-bond yield rises; Gov’t raises P15B

As it is, an Inquirer poll economists projected that the central bank would deliver a third rate later this week amounting to 25 basis points following a mild inflation uptick in November and slower-than-expected economic growth in the third quarter.

But while there is wide expectation of further BSP easing, Ricafort said local investors had still asked for higher yield due to some “window-dressing” activities before the end of the year.

“Treasury bill average auction yields were again mostly slightly higher for the 11th straight week amid some premium on crossing-the-year funds as the accounting year-end draws closer,” he explained.

The BTr said the 91-day T-bill fetched an average rate of 5.818 percent, up from 5.774 percent in the previous auction.

Similarly, yield on the 182-day debt notes rose to 5.975 percent, from 5.922 percent before.

Rates charged on the 364-day T-bill averaged 5.977 percent, more expensive than the 5.968 percent recorded in the last offering.

For 2024, 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 5.7 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.