Home Economy T-bill rates may rise further on expectations of faster inflation

T-bill rates may rise further on expectations of faster inflation

by
RJ JOQUICO-UNSPLASH

RATES of the Treasury bills (T-bills) on offer on Monday may climb amid an expected uptick in October headline inflation.

The Bureau of the Treasury (BTr) will auction off P20 billion in T-bills on Monday, or P6.5 billion in 91- and 182-day papers and P7 billion in 364-day debt.

T-bill rates could track the mixed movements seen for the same tenors at the secondary market as the market expects slightly faster headline inflation in October, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Thursday, the 91- and 364-day T-bills went up by 12.88 basis points (bps) and 7.16 bps week on week to end at 5.3267% and 5.8008%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of Oct. 31 published on the Philippine Dealing System’s website. Meanwhile, the 182-day paper’s yield slipped by 0.58 bp to 5.7955%.

Philippine inflation likely picked up in October amid higher prices of food and fuel, analysts said.

A BusinessWorld poll of 11 analysts yielded a median estimate of 2.4% for the October  consumer price index, within the BSP’s 2-2.8% forecast for the month.

If realized, October inflation would be faster than the 1.9% in September. However, it would still be slower than the 4.9% in the same month a year ago.

Last week, the Treasury raised P20 billion as planned from the T-bills it auctioned off as total bids reached P56.046 billion, almost thrice as much as the amount on offer.

Broken down, the Treasury borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P14.516 billion. The three-month paper was quoted at an average rate of 5.586%, 12.3 bps higher than the previous week, with bids ranging from 5.48% to 5.674%.

The government also made a full P6.5-billion award of the 182-day securities, with bids reaching P20.17 billion. The average rate of the six-month T-bill stood at 5.752%, up by 2.1 bps, with accepted bid yields at 5.74% to 5.764%

Lastly, the Treasury raised P7 billion as planned via the 364-day debt papers as demand for the tenor totaled P21.36 billion. The average rate of the one-year debt went up by 6.5 bps to 5.751%, with accepted rates ranging from 5.65% to 5.77%.

The government is looking to borrow P90 billion from the domestic market this month, or P60 billion via T-bills and P30 billion through Treasury bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product this year. — A.M.C. Sy

Related News