The national government borrowed partially as banks demanded higher returns amid the Israel-Hamas conflict, which led to higher global crude oil prices.

At Monday's auction of Treasury bills on Oct. 16, the national government raised a total of P11.947 billion, below the P15 billion program. Total demand reached P19.371 billion.

The government failed to meet its intended goal for 91-day securities, raising only P3.367 billion despite receiving bids of P5.137 billion.

The average interest rate for the three-month T-bills rose by 18.4 basis points to 5.990 percent, compared to the previous week's rate of 5.806 percent.

Similarly, the average rate for the benchmark 182-day IOUs increased by 9.2 basis points to 6.207 percent from 6.115 percent in the previous weekly auction.

The government only allocated P3.310 billion for the six-month securities, with total demands reaching P6.520 billion.

However, the government sold P5 billion worth of one-year papers as planned, with total bids reaching P7.714 billion.

The average yield on the 364-day T-bills posted a slight increase of 8.3 basis points to 6.388 percent from 6.305 percent.

Meanwhile, at the Bloomberg Valuation Service (BVAL), the yield on the three-month bill was lower at 5.87 percent, while the yield on the six-month bill stood at 6.15 percent.

The average rate for the 12-month bill was also lower in the secondary market at 6.31 percent.

The increase in interest rates can be attributed to the latest signals from local monetary authorities on a possible 0.25 local policy rate hike, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC).

He also noted the recent warnings from the United States and Iran of a wider Israel-Hamas war.

“The markets are on wait-and-see stance as Israel plans soon a major ground offensive/war vs. Hamas in Gaza,” Ricafort said.