THE GOVERNMENT partially awarded the Treasury bills (T-bills) it auctioned off on Monday as traders asked for higher yields ahead of the expected rate hike by the Bangko Sentral ng Pilipinas’ (BSP) this week.
THE GOVERNMENT partially
Broken down, the Treasury borrowed P5 billion as planned via the 91-day securities on Monday, with bids reaching P13.7 billion. The average rate of the tenor rose by 11.4 basis points to 4.464% from the 4.35% fetch for last week’s partial award, with the government accepting offers with yields from 4.35% to 4.54%.
At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 4.1094%, 4.6397%, and 5.0454%, respectively, based on the PHP Bloomberg Valuation Reference Rates data provided by the Treasury. “The T-bill auction average yields continued to go up week on week ahead of the widely expected local policy rate hike on Thursday. The Treasury continued to make partial awards due to high bid yields,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
The BSP has raised borrowing costs by 225 bps since May, bringing the policy rate to 4.25%, in a bid to rein in inMeanwhile, the Fed increased rates by 75 bps for a fourth straight time this month, bringing cumulative hikes since March to 375 bps. The federal funds rate now stands a range between 3.75% and 4%.
For the first 10 months, inflation averaged 5.4%, still lower than the BSP’s 5.6% full-year forecast but higher than its 2-4% target.
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