National Treasurer Rosalia de Leon said Monday Treasury bill (T-bill) rates posted mixed results on expectations for rate hikes both here and in the United States due to the accelerating inflation rate.
The average rate of the 91-day paper declined to 1.380 percent from 1.587 percent during the auction last March 28.
On the other hand, the rate of the 182-day T-bill rose to 1.781 percent and the 364-day to 1.883 percent. These were at 1.856 percent and 2.137 percent during the auction last week.
The Bureau of the Treasury (BTr) offered all the tenors for PHP5 billion and all were oversubscribed by at least twice the offer volume. The auction committee made full awards across the board.
Total tenders for the three-month paper amounted to PHP29.35 billion while it reached PHP14.17 billion for the six-month paper and PHP11.072 billion for the 364-day tenor.
In a Viber message to journalists, de Leon attributed the large bids for the T-bills to the market’s taking position on the front end “with faster inflation, expected surge on Fed rate and possible rate action from BSP in the second half.”
“Continued rate upward movements in the 182 and 364-day given higher inflation forecast this year and as BSP start(ed) hiking policy rates,” she added.
The BSP’s policy-making Monetary Board (MB) recently hiked the central bank’s average inflation forecast for this year to 4.3 percent, higher than the government’s 2-4 percent target band, and the 2023 projection to 3.6 percent due to upticks of oil prices in the international market.
These were at 3.7 percent and 3.3 percent for 2022 and 2023, respectively, during the Board’s rate-setting meeting last February.
Similarly, the Fed hiked its key rates by 25 basis points to between 0.25 to 0.50 percent last month as the consumer price index (CPI) in the US registered its four-decade high since last January.
Fed authorities hinted at more upward rate adjustments for the rest of the year.
Source: Philippines News Agency
