Short-term benchmark yields drop anew

Published January 10, 2022, 2:42 PM

by Chino S. Leyco

Short-term benchmark interest rates dipped after inflation slowed in December 2021.

At the Bureau of the Treasury’s auction on Monday, Jan. 10, the yield on three-month papers which banks use in pricing their loans, eased to 0.969 percent from the 1.075 percent fetched during the previous week.

The government accepted P5 billion of the total tenders despite demand for the 91-day Treasury bills reaching P23.702 billion during the auction of the debt papers.

Yield on the 182-day T-bill also dropped to 1.121 percent from the previous 1.269 percent as investors were willing to buy P24.98 billion of the six-month IOUs. The government only accepted P5 billion.

Moreover, interest rates on the 364-day debt notes declined to 1.468 percent from the previous 1.600 percent with total tenders amounting to P24.9 billion, P5 billion of which were accepted by the government.

National Treasurer Rosalia V. De Leon said the government made a full award as demand for the IOUs remained strong at lower interest rates.

De Leon attributed the favorable yields to the December inflation print that fell to 3.6 percent.