T-Bill rates continue to rise

Published July 4, 2022, 3:36 PM

by Lee C. Chipongian

The average rates for all Treasury Bill (T-Bill) tenors increased on Monday, July 4, ahead of the government’s release of the June inflation which is expected to hit six percent.

Based on data from the Bureau of the Treasury (BTr), yield on the 91-day T-Bills increased to 1.908 percent from 1.855 percent last week on high inflation worries.

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The average rate on 182-day T-Bills also rose to 2.608 percent versus 2.400 percent while the 364-day tenor averaged at 2.811 percent, also up from 2.630 percent last June 27.

The BTr fully-awarded all tenors. For the 91-day, it received P18.673 billion tenders against a P5-billion offer, rejecting P13.673 billion.

The government also accepted P5 billion for the 182-day tenor after receiving P6.376 billion. Bids for the longer-dated 364-day T-Bills amounted to P7.710 billion versus offer of P5 billion.

National Treasurer Rosalia V. De Leon said on Monday that they had full awards for all tenors.

“Rates sustained upward adjustments with inflation forecast from BSP (Bangko Sentral ng Pilipinas) exceeding 6% (percent),” said de Leon. “Market seeing BSP delivering harder rate punch to quash inflation,” she added.

The BSP’s Monetary Board on May 19 and on June 23 raised its key rate by 25 basis points (bps) each, bringing the current policy rate to 2.5 percent to temper an inflation rate that is expected to range between 5.7 percent to a high of 6.5 percent for June. The June inflation will be released on Tuesday, July 5.

The BSP has noted that the risks to inflation outlook are now tilted to the upside not only for this year but also extended to 2023 before balancing out in 2024.

Possible sources of upside pressures are continued higher fuel costs, the shortage of domestic fish supply and additional transport fare hikes due to the rising oil prices.

The BSP’s average inflation forecast for this year is five percent and 4.2 percent in 2023.

 
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