T-bill rates trend lower

MANILA, Philippines — Average yields on short-dated local debt paper of the government were mostly lower during Monday’s sale of Treasury bills (T-bills) as lower global oil prices fueled expectations that inflation would stay benign.

This can then support further monetary policy easing.

Auction results showed the Bureau of the Treasury (BTr) was able to raise its target amount of P22 billion from T-bills.

READ: T-bill yields rise; P22B raised

The offering was met with strong demand, attracting P85.5 billion in total tenders that exceeded the original size of the issuance by four times.

The robust investor appetite, in turn, helped bring down borrowing costs for the government.

But Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said expectations of within-target inflation amid lower oil prices in the international market might have also led to the decline in T-bill rates.

“Treasury bill average auction yields were mostly slightly lower after rising for three straight weeks, after global crude oil prices recently lingered among two-month lows, which could support relatively benign inflation and spur future monetary easing,” Ricafort said.

The BTr said the 91-day debt paper fetched an average rate of 5.283 percent, cheaper than the 5.329 percent seen in the previous week.

At the same time, the average rate for the 182-day T-bill went down to 5.610 percent, from 5.672 percent in the last auction.

Lastly, the 364-day T-bill was the only tenor that saw an increase in borrowing costs, with local creditors asking for an average rate of 5.770 percent, more expensive than the 5.754 percent seen last week. INQ