The Philippine government made a full award of the Treasury bills (T-bills) it offered on Monday with mixed yields after hawkish signals from the central bank and as players monitor developments between the United States and Iran.
The Bureau of the Treasury (BTr) raised P50 billion as planned from the T-bills it auctioned off as total tenders reached P126.091 billion, over twice as much as the amount on offer.
The Treasury borrowed P20 billion as planned via the 91-day T-bills as demand for the tenor reached P56.385 billion. The three-month paper fetched an average rate of 5.097%, declining by 4.6 basis points from 5.143% last week.
For the 182-day debt, the government likewise raised P20 billion as tenders hit P47.376 billion. The average yield on the six-month T-bill was at 5.707%, down by 2.2 bps from 5.729% previously.
Lastly, the BTr sold its target P10 billion in 364-day securities as bids for the tenor totaled P22.33 billion. The one-year paper fetched an average rate of 5.972%, inching up by 0.8 bp from 5.964% last week.
Demand for the T-bills was relatively weaker week on week, with rates mostly moving sideways, a trader said in a text message. This is likely due to the back-and-forth news regarding the Middle East conflict.
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T-bill rates were mixed after the Bangko Sentral ng Pilipinas (BSP) maintained their cautious stance despite softer-than-expected June inflation data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Average yields were mostly lower due to the recent downward correction in global crude oil prices, he added. However, core inflation, which discounts volatile fuel and food prices, bucked the headline trend as it quickened for a sixth consecutive month to 4.4% in June.
The central bank said after the data release that inflation pressures remain strong. “Rising core inflation indicates broadening price pressures and second-round effects, including higher inflation expectations,” it said.
The Monetary Board has raised benchmark borrowing costs by a total of 50 bps since April to curb spiraling prices and keep inflation expectations anchored amid the global oil shock caused by the Middle East conflict.
The government is targeting to raise P30 billion from reissued 10-year Treasury bonds with a remaining life of seven years and one month.
The Treasury wants to raise P410 billion from the domestic market this month or P250 billion via T-bills and P160 billion through T-bonds.
