The government successfully raised funds through the sale of short-term debt papers on higher interest rates following a faster inflation rate in July and higher-than-expected gross domestic product (GDP) in the second quarter.

At an auction on Aug. 12, the national government raised P20 billion as planned via Treasury bills it auctioned off. Total bids reached P52.540 billion, more than twice the total offering.

The Treasury made a full P6.5-billion award of the 91-day T-bills as tenders for the tenor reached P15.290 billion.

The three-month yields increased to an average of 5.900 percent, compared to the previous week's 5.828 percent.

The government also raised P6.5 billion as planned from the 182-day securities as bids for the tenor reached P17.260 billion.

The six-month T-bill average rate was 6.093 percent, up from 6.062 percent last week.

Lastly, the Treasury borrowed the programmed P7 billion through the 364-day debt papers as demand for the tenor stood at P19.990 billion.

On the other hand, the average rate of the one-year T-bill decreased to 6.062 percent from 6.074 percent in the previous auction.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.843 percent, 6.106 percent, and 6.198 percent, respectively, based on PHP Bloomberg Valuation Reference Rates data.

T-bill yields increased after July inflation data posted a faster growth of 4.4 percent and “that could reduce the possibility of a 0.25 basis points local policy rate cut as early as Aug. 15, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.

Finance Secretary Ralph G. Recto, also a member of the monetary board, earlier said that he expects a reduction in interest rates within the year, which could happen on or before the Aug. 15 policy meeting.

“I would prefer lower rates so that we could borrow domestically with lower rates as well,” Recto said.