T-bill rates continue to rise

03-Mar-2021 Intellasia | PhilStar | 5:02 AM Print This Post

The government awarded in full the short-term debt papers offered yesterday even as rates continued to rise across the board on concerns over rising inflation and weakening demand.

In yesterday’s T-bill auction, the Bureau of the Treasury raised P20 billion from total tenders worth P41 billion, making the initial offer twice oversubscribed.

The average rates for the benchmark 91-day T-bills rose to 1.04 percent from 0.875 percent last week, while the rate for the 182-day debt paper rose to 1.226 percent from 1.067 in the previous week.

Yield for the 364-day debt paper, meanwhile, rose to an average of 1.680 percent from 1.527 percent last week.

Raised as programmed were P5 billion each from the 91-day and 182-day T-bill offers, and P10 billion from the 364-day offer.

National Treasurer Rosalia de Leon declined to comment on the rates, but said the BTr would not open the tap facility that allows government securities eligible dealers to access securities after the initial primary auction.

Bond traders said the demand for higher rates was due to concerns over rising inflation, which is expected to spike to 4.8 percent in February coming from 4.2 percent in January because of higher food prices.

“The market is expecting higher inflation so there is caution. The announcement of inflation figures on Friday will be key (to the trend in rates) in the coming weeks” a bond trader said.

The trader also noted that the rise in rates also tracks the sustained uptick in yields in US Treasuries.

Another trader said that aside from market caution over inflation, demand for T-bills is still weak as the sale of retail Treasury bond (RTB) continues until March 4.

The three-year RTBs carry a coupon rate of 2.375 percent and are being sold for a minimum investment of only P5,000.

The BTr wants to raise P160 billion from the local bond market this month even with rising rates to take advantage of ample liquidity in the market.

This comprises P20 billion in short-dated debt papers to be auctioned every Monday for a total of P100 billion in March. To be auctioned every other Tuesday, meanwhile, are P60 billion worth of Treasury bonds.



Category: Philippines

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