Philippine benchmark interest rates for short-term loans dipped amid expectations of slower inflation rate.
At Monday's auction of Treasury bills on Jan. 31, the bellwether 91-day T-bill rate, which banks use in pricing their loans, slightly fell to 0.691 percent from 0.693 percent previously.
The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P17.202 billion more of the government security or IOU.
Yield on the 182-day T-bill also dropped to 1.023 percent from the previous 1.077 percent as investors were willing to buy P24 billion of the six-month IOUs. The government accepted P5 billion as planned.
Moreover, interest rates on the 365-day T-bill declined to 1.408 percent from the previous 1.410 percent with total tenders for the one-year paper amounting to P18.569 billion, of which the government accepted P5 million.
National Treasurer Rosalia V. De Leon said there was strong buying interest in the front end as investors expect inflation to fall to three percent based on recent surveys.
In December, headline inflation settled at 3.6 percent.