Benchmark short-term interest rates rose on the back of higher inflation forecast of the Bangko Sentral ng Pilipinas (BSP) and concerns surrounding Ukraine.
At Monday's auction on Feb. 21, yields on short-term government debt papers, increased, with the returns on the 91-day Treasury bill up to 0.899 percent from 0.810 percent fetched last week.
Total tenders reached P13.314 billion for the P5 billion worth of 91-day T-bills on offer. The auction made a full award to P1.3 billion, effectively letting the interest rates increased.
The Treasury also allowed the yield on the six-months debt paper to rise to 1.157 percent from 1.066 percent set during the last auction on Feb. 14. The government however accepted all P5 billion worth of bids for the IOUs as banks were willing to lend up to P11.49 billion.
Aside from the 182-day debt paper, the one year IOU, likewise, increased to 1.568 percent from the previous 1.475 percent. The government secured the full award of its borrowing for the week, amounting to P5 billion. Total tenders hit P11.118 billion.
“Interest rates rose following the upward adjustment for inflation this year and increasing tension in Ukraine,” National Treasurer Rosalia V. De Leon told reporters after the auction.
Last week, the BSP raised its inflation forecast for 2022 to 3.7 percent from 3.4 percent previously.