Partial awards for all T-Bills

The 91-day Treasury Bills’ (T-Bills) auction on Monday, June 20, had an average yield of 1.759 percent, up from the previous week’s 1.572 percent.

The Bureau of the Treasury (BTr) received tenders amounting to P11.285 billion for the three-month bills while accepting only P3.07 billion and rejecting P8.215 billion.

“Partial awards for all T-Bill tenors,” according to National Treasurer Rosalia V. De Leon.

“As expected, markets asked for high premium to cushion against upward adjustments in rates delivered by (US) Fed and to be followed on Thursday by the Monetary Board to quell rising price pressures,” De Leon commented on Monday.

She added, “while incoming Govenor (Felipe) Medalla spoke of gradual tightening, some analysts still see a 50 bps (basis points) move following 75 bps delivered by Fed to slash elevated inflation.”

BTr’s Monday auction of 182-day T-Bills, meantime, resulted to a higher interest rate of 2.132 percent versus 1.934 percent last week. It received P5.82 billion tenders from offer of P5 billion, and it accepted P3.62 billion while rejecting P2.2 billion.

The auction of the longer-dated 364-day T-Bills also yielded a higher rate of 2.454 percent against 2.325 percent last week. The BTr received P5.5 billion in tenders while accepting P3.85 billion and rejecting P1.65 billion.

De Leon said the next weeks’ T-Bill auctions will take in new data such as how much and how soon the BSP will adjust its policy rate, the sustained growth and general market sentiments.

“There are factors being considered in the auctions including market levels. Pace of rate normalization would need to be calibrated against impact on the economy particularly as we still have to fully recover from pandemic,” she said.

The Bangko Sentral ng Pilipinas’ (BSP) Monetary Board is meeting on Thursday, June 23, to raise its key rate anew. Outgoing central bank Governor Benjamin E. Diokno and incoming BSP chief, Medalla, have both signalled another 25 bps rate hike after its last 25 bps adjustment on May 19.

However, market analysts expects to see a bigger BSP policy rate hike of 50 bps following the US Federal Reserve’s 75 bps rate increase on Wednesday. It was the biggest US rate hike since 1994.

The BSP policy rate is currently at 2.25 percent. Medalla has said that there could be at least three 25 bps rate hikes for this year. The first was on May 19 and the next two are June 23 and on Aug. 18.

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