Investors press anew for higher short term yields
At A Glance
- The national government raised a total of P15 billion, as planned, on higher rates. Total demand reached P39.831 billion.<br>The 90-day Treasury bill rate rose to 5.870 percent from 5.772 percent last week.<br>The yield on the 181-day T-bill inched up to 5.973 percent from the previous 5.885 percent.<br>Lastly, there was an increase in the average yield for the one-year T-bills, increasing from 5.983 percent a week ago to 6.044 percent.
Investors pushed anew for higher rates on short-term debt papers following hawkish signals from the US Federal Reserve and other local monetary officials.
At an auction on Monday, April 15, the Bureau of the Treasury raised P15 billion as planned with the full-award of Treasury bills (T-bills).
The auction was more than two times oversubscribed with tenders amounting to P39.831 billion.
The average rate on the benchmark 90-day T-bills increased to 5.870 percent from 5.772 percent in the previous weekly auction.
The government raised P5 billion through the sale of the three-month papers as planned. The total bids received reached P10.939 billion.
The yield on the 181-day T-bill also inched up to 5.973 percent from the previous 5.885 percent as investors were willing to buy P13.362 billion of the six-month IOUs. The government awarded P5 billion as planned.
Lastly, there was also an increase in the average yield for the one-year T-bills, increasing from 5.983 percent a week ago to 6.044 percent.
The Treasury raised P5 billion by selling 364-day IOUs with demands reaching P15.260 billion.
At the Bloomberg Valuation Service (BVAL), the yield on the three-month bill was lower at 5.773 percent, while the yield on the six-month bill stood at 5.897 percent.
The average rate for the 12-month bill was also a tad higher in the secondary market at 6.051 percent.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that higher rates may be due to the signals of non-reduction of banks' reserve requirement ratio by the third quarter and the increased inflation readout in March.
The inflation rate ticked up to 3.7 percent during the month for the second consecutive month, driven by faster increases in food and transportation costs.
This could be offset by the seasonal increase in tax revenue collections in April that may help in reducing the budget deficit and also reduce borrowings, Ricafort said.
For April, the Bureau of Internal Revenue looks to collect a total of P405.94 billion that will mainly come from net income, profits, and value added-tax.