Philippine benchmark interest rates for short-term loans rose amid expectations of higher inflation.
At Monday's auction of Treasury bills on June 13, the bellwether 91-day T-bill rate, which banks use in pricing their loans, increased to 1.572 percent from 1.440 percent previously.
The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P12.33 billion more of the government security or IOU.
Yield on the 182-day T-bill also jumped to 1.934 percent from the previous 1.834 percent as investors were willing to buy P11.35 billion of the six-month IOUs. The government accepted P5 billion as planned.
Moreover, interest rates on the 365-day T-bill went up to 2.325 percent from the previous 2.297 percent with total tenders for the one-year paper amounting to P6 billion, of which the government accepted only P4 billion, below the P5 billion program.
National Treasurer Rosalia V. De Leon said yields moved north with higher inflation particularly in US becoming persistent necessitating more aggressive rate hike.
"Locally, BSP has signalled to move this coming MB policy meet with 25 basis point hike," de Leon said.