Treasury bill rates slide across the board

MANILA, Philippines  -Interest rates on Treasury bills eased across the board, but the national government raised only P12.8 billion out of the planned P15 billion as the auction committee moved to keep the cost of borrowing lower than those prevailing at the secondary market.

The average rate on the benchmark 91-day T-bills decreased by 10.4 basis points (bps) to 5.045 percent from 5.149 percent last week.

In the auction held April 3, the committee raised P5 billion on 91-day T-bills as planned.

However, the committee awarded only P2.8 billion out of P5 billion of the offered 182-day T-bills. The new average yield was 0.3 bp lower at 5.674 compared to the previous 5.677 percent.

Had the committee led by the Bureau of the Treasury gone with a full award, the average rate would have risen by 4 bps to 5.717 percent.

The committee went for a “partial award for the 182-day bills to guide rates within secondary levels,” National Treasurer Rosalia de Leon told reporters.

“However, the announced cut in oil output by the Organization of Petroleum Exporting Countries adds another challenge to slay the ugly head of inflation,” De Leon said.

OPEC+ announces surprise oil cuts of around 1.16 mbpd from May to year-end

Rate hike

Oil output reductions put upward pressures on inflation in net importing countries like the Philippines, and investors take this to mean the possibility of increasing interest rates.

Further, the P5-billion offer of 364-day T-bills was fully awarded, and the average rate went down by one basis point to 5.977 percent from 5.987 percent.

Secondary market

The latest average rates were also lower across the board compared to prevailing rates for corresponding done deals at the secondary market.

The average was lower by 0.5 bp for the 91-day T-bills compared to 5.05 percent at the Bloomberg Valuation Service.

As with the primary market comparison, the new average for the six-month bills was 0.3 bps lower while that for the yearlong bills was 5.2 bps lower.

At the secondary market, rates for the six-month debt paper were pegged at 5.677 percent and for the yearlong debt paper at 6.029 percent.

At the auction, all three tenors were oversubscribed, with lenders making twice the offer for the 91-day bills and 182-day bills.

For these, respectively, lenders tendered P13.49 billion and P10.435 billion.

The 364-day bills were also oversubscribed with investors ready with P9.815 billion. INQ

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T-bills suggest easing prices

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