T-bills rates rise for 5th straight week

MANILA  -The Bureau of the Treasury’s auction of short-term debt paper posted mixed results on Monday after investors asked for higher yields for the fifth consecutive week.

The government borrowed P14.3 billion during the sale of Treasury bills, below the P15 billion that it had planned to raise.

This, despite high investor appetite for the securities. Auction results showed the offer attracted P23.4 billion in total bids, 1.6 times bigger than the original size of the issuance.

But the strong demand did not stop yields from going up for the fifth straight week.

Analysts have said that the hawkish stance of the Bangko Sentral ng Pilipinas would likely push rates higher in the coming months amid stubbornly high inflation.

High inflation tends to erode investment returns, prompting investors to ask for higher yields to shield their money.

READ: Inflation climbed up some more in September, says BSP

Breaking down the auction results, the Treasury decided to fully award bids for the 91- and 364-day T-bills, raising P5 billion each.

Rates for the 3-month papers averaged 6.149 percent, higher than the 5.990 percent seen last week, while the 1-year securities fetched an average yield of 6.479 percent, up from the previous auction’s 6.388 percent.

Meanwhile, the government borrowed P4.26 billion via the sale of 182-day T-bill, lower than the planned amount of P5 billion. This debt note has the lowest demand among the tenors, with total orders amounting to P5.46 billion.

Auction results showed rates for the 6-month T-bill averaged 6.330 percent, higher than the 6.207 percent recorded last week.

The government borrows money from creditors at home and abroad to bridge its budget gap, which is capped at 6.1 percent of gross domestic product this year.

For October, the Treasury is targeting to raise P150 billion worth of domestic debt. Monday’s sale brought the total T-bills borrowings to P51.6 billion in October, below the target amount of P60 billion for the month.