T-bill rates increase for 5th straight week

MANILA, Philippines — The government managed to borrow P20 billion in short-term securities even after rates moved upward for the fifth straight week amid expectations of a faster October inflation print.

The Bureau of the Treasury yesterday fully awarded the entire P20 billion of T-bills offered at the first T-bill auction for November.

Yields for the three tenors were mostly higher in reference to last week’s rate.

Rates for the 91-day offer rose by 27.8 basis points to 5.605 percent from 5.327 percent in the secondary market and also up from last week’s 5.586 percent.

Yields averaged 5.735 percent for the 182-day T-bills, 6.1 basis points below the secondary rate and down from last week’s 5.752 percent.

The 364-day short-dated debt papers saw rates at 5.786 percent, slightly down by 1.5 basis points from the reference rate of 5.801 percent but higher than last week’s level of 5.751 percent.

The Treasury awarded P6.5 billion each for the 91- and 182-day offer and P7 billion for the one-year tenor.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said yields corrected higher this week in anticipation of a faster October headline inflation.

Inflation last month likely picked up and rose to the two-percent level after slipping to a four-year low of 1.9 percent in September.

This also came a day before the much-anticipated US presidential elections as the markets priced in a possible Trump victory that could lead to higher inflation and Treasury yields.

T-bill demand, on the other hand, rose by 25 percent week-on-week to reach P69.87 billion. The auction was oversubscribed by 3.49 times.

Bids went up across the board to P19.155 billion for the three-month offer, P26.065 billion for the six-month and P24.65 billion for the one-year tenor.

For November, the Treasury aims to borrow P90 billion from local creditors. Of this, P60 billion is expected to come from short-dated T-bills.