Yields on short-term notes mixed

Published August 8, 2022, 2:24 PM

by Chino S. Leyco

Yields on short-term government borrowings were mixed as investors watch for clues concerning future Bangko Sentral ng Pilipinas and US Federal Reserve’s decisions.

At an auction of Treasury bills on Monday, Aug. 8, the bellwether 91-day rate, which banks use in pricing their loans, dropped to 1.850 percent from 2.090 percent previously.

The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P18.69 billion more of the government security or IOU.

Meanwhile, the yield for the 182-day T-bill went up to 3.211 percent from 3.188 percent last week.

Investors were willing to buy as much as P17.165 billion of the six-month T-bills, but the government only accepted P5 billion worth of bids as planned.

The yield for the 364-day T-bill also inched up to 3.635 percent from 3.480 percent.

Treasury accepted P5 billion worth of bids. Investors, however, were willing to buy more, as tenders reached P7.91 billion.

After the auction, National Treasurer Rosalia V. De Leon said interest rate on three-month papers declined on the back of overwhelming demand from the market.

De Leon said investors were on a “wait and see” stance for the next central bank’s next move.

“Market is also looking for clues whether US Fed will pivot or sustain rate hike after payrolls report beat market estimates,” the Treasurer told reporters.