T-bill rates mostly up as rate pause still on investors’ mind

MANILA, Philippines — Yields on short-dated government debt securities were mostly up for the third straight week, as “disappointment” over the central bank’s rate pause still loomed large over investor minds.

This, despite the fresh cut to banks’ reserve requirement and the country’s exit from the global dirty money “gray list.”

But that did not stop the Marcos administration from raising its target amount of Treasury bills (T-bills).

READ: T-bill yields rise; P22B raised

Auction results showed the Bureau of the Treasury (BTr) sold P22 billion via sale of T-bills, as planned.

The offering attracted P83.7 billion in total bids, exceeding the original size of the issuance by 3.8 times.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said rates still went up despite the strong demand as investors have yet to get over the Bangko Sentral ng Pilipinas’ (BSP) decision to keep its policy rate steady at 5.75 percent early this month—a move that bucked market expectations.

Still, the disappointment was “offset” by the 200-basis point cut in banks’ cash requirements and the decision of Paris-based watchdog Financial Action Task Force to remove the Philippines from its list of countries under increased monitoring, Ricafort added.

The 91-day T-bill fetched an average rate of 5.329 percent, higher than the 5.318 percent seen last week.

At the same time, the average rate for the 182-day debt paper went up to 5.672 percent, from 5.662 percent before.

But yields sought by local creditors for the 364-day T-bill averaged 5.754 percent, down from 5.780 percent seen during the last auction.

For this year, the Marcos administration is targeting to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion, which is equivalent to 5.3 percent of the country’s gross domestic product. INQ