T-bill rates ease on expectations of lower inflation

Rates on the government’s short-term debt securities went down across the board for the fourth time amid market expectations that inflation will see a further slowdown.

The Treasury bills continued to be amply oversubscribed, but tenders saw declines across the three tenors. Monday’s T-bill auction was the fourth weekly since the start of this year.

Before that, the last T-bill auction for 2021—held on Dec. 13—showed mixed results.

On Monday, the yield on the bellwether 91-day T-bill eased by 0.2 basis point to average at 0.691 percent.

Rates on the 182-day bill also decreased by 5.4 basis points to average 1.023 percent as well as those on the 364-day bill, by 0.2 basis point to average 1.408 percent.

The Bureau of the Treasury raised P15 billion as planned. Investors tendered a total of P59.77 billion or almost four times the total offered volume.

For the benchmark bill alone, tenders reached P17.202 billion or more than thrice the P5-billion offer.

Lenders made available P24 billion for the 182-day bill and P18.569 billion for the 364-day paper—respectively more than twice and four times the offers of P5 billion and P6 billion.

“There was strong buying interest in the front end [but] bids declined with inflation further decelerating to 3 percent according to survey,” National Treasurer Rosalia de Leon told reporters.

In the Bangko Sentral ng Pilipinas’ (BSP) inflation report covering the fourth quarter of 2021, BSP Governor Benjamin Diokno said the government’s target for annual headline inflation under the inflation targeting framework was retained between 2 percent and 4 percent—specifically, the midpoint or 3 percent—the same goal set for 2021.

Diokno said the interagency Development Budget Coordination Committee set the same numbers for the inflation target in 2023 and 2024.

“The inflation target range continues to be an appropriate quantitative representation of the medium-term goal of price stability that is optimal for the Philippines given the current structure of the economy and outlook of macroeconomic conditions over the next few years,” the BSP chief said. INQ