The national government borrowed lower than programmed after Philippine benchmark interest rates for short-term loans rose on looming aggressive tightening.

At Monday's auction of Treasury bills on July 11, the government sold only P13.16 billion worth of short-term IOUs, below the P15 billion program as yields for six-months and one-year debt papers rose.

Interest rates on the 182-day T-bill jumped to 2.907 percent from the previous 2.608 percent as investors were willing to buy P7.05 billion of the six-month IOUs. The government accepted only P4.1 billion.

Likewise, yield on the 365-day T-bill went up to 2.981 percent from the previous 2.811 percent with total tenders for the one-year paper amounting to P5.11 billion, of which the government accepted only P4.06 billion, below the P5 billion program.

However, the bellwether 91-day T-bill rate, which banks use in pricing their loans, slightly dropped to 1.876 percent from 1.908 percent previously.

The Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P24.563 billion more of the government security or IOU.

Last week, Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said central bank was ready to take more aggressive policy action amid rising inflation and currency pressures.

“In particular, BSP is prepared to raise its policy rate by 50 bps by August. The BSP is ready to take further policy actions, if needed,” Medalla said.

National Treasurer Rosalia V. De Leon said Monday’s lower than programmed award was based on the bureau’s “reasonableness test” including guidance from BSP on path of rate hike.