Benchmark interest rates decline anew

Published January 24, 2022, 3:51 PM

by Chino S. Leyco

Benchmark interest rates declined anew as investors await the US Federal Reserve’s meeting.

At Monday’s auction Jan. 24, the yields on short-term government debt papers, which banks use in pricing their loans, went down, with the returns on the 91-day Treasury bill fell to 0.693 percent from 0.875 percent a week ago.

Total tenders reached P27.976 billion for the P5 billion worth of 91-day T-bills on offer. The auction committee decided to make a full award.

The rates on the six-month IOUs also dropped to 1.077 percent from the previous 1.097 percent, with the government accepting bids for P5 billion worth of the 182-day T-bills on offer even as total tenders reached P27.857 billion.

Moreover, the yield on the one-year debt papers decreased slightly to 1.410 percent from 1.415 percent as the government accepted P5 billion worth of bids as planned. Investors offered to lend P20.532 billion.

“Investors were waiting fro signal from the US Fed for rate liftoff,” National Treasurer Rosalia V. De Leon told reporters after the auction. “There were strong bias for short-term tenors as seen in the auction with share reduction on rates.”

The US central bank’s Federal Open Market Committee is scheduled to meet on Jan. 25 to 26.