Benchmark short-term yields post mixed results

Benchmark interest rates for short-term debt papers posted mixed results as investors await President Marcos’ first state of the nation address (SONA).

At Monday's auction of Treasury bills on July 25, the bellwether 91-day Treasury bill rate, which banks use in pricing their loans, dropped to 2.273 percent from 2.323 percent last week.

The Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P20.574 billion of the government security or IOU.

Meanwhile, interest rate on the 182-day IOU has risen to 3.143 percent from 3.083 percent last week.

The six-month debt papers attracted P12.12 billion worth of bids, and the government in full the P5 billion on offer.

Likewise, yield on the 364-day T-bill also rose to 3.356 percent from the previous 3.258 percent as investors were willing to buy P6.15 billion of the one-year IOUs. The government awarded only P3.75 billion of the P5 billion programmed.

Nation Treasurer Rosalia V. De Leon said the government decided to have a partial award for the one-year papers, saying the interest rate sought by investors was “excessive.”

“Awarding beyond 3.5 percent is excessive cushion against inflation as we saw recent drops in oil prices,” de Leon told reporters after the auction.

Moreover, she said “everyone is waiting PBBM’s [President Ferdinand “Bong Bong” Marcos Jr. SONA message especially the administration’s priorities and initiatives to curb inflation rise.