Short-term yields post mixed results

Published August 1, 2022, 3:23 PM

by Chino S. Leyco

Philippine benchmark interest rates for six-month and one-year loans rose, while the yield for three-month papers dropped.

On Monday, Aug. 1, auction of bellwether 91-day Treasury bill rate, which banks use in pricing their loans, dropped to 2.090 percent from 2.273 percent previously.

The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors, however, were asking for P24.073 billion of the government security or IOU.

Meanwhile, yield on the 182-day T-bill jumped to 3.188 percent from the previous 3.143 percent as investors were willing to buy P12.94 billion of the six-month IOUs. The government accepted P5 billion as planned.

Likewise, interest rates on the 365-day T-bill went up to 3.480 percent from the previous 3.356 percent with total tenders for the one-year paper amounting to P6.293 billion, of which the government accepted P5 billion as programed.

For August, the government is planning to borrow P215 billion from the domestic debt market, higher than the P200 program in the previous month.

During the month, the Treasury would auction off P15 billion each in T-bills for the five Mondays of August for a total of P75 billion.

The short-dated T-bills will be offered at P5 billion each, with benchmark tenors of 91, 182 and 364 days.

For the long-term debt securities, the Treasury plans to raise P35 billion each in T-bonds for the four Tuesdays of the month for a total of P140 billion.

The T-bonds on offer will have maturities of 3.5, seven, 10 and 5.5 years, respectively.