The Bureau of the Treasury, or BTr, awarded P17 billion out of its initial program of P15 billion in Treasury bills or T-bills at its auction on Tuesday as investors expect the central bank to keep its policy rate elevated in the next several months.

The BTr said 91-day, 182-day and 365-day T-bills with a programmed offer value of P5 billion each attracted total bids amounting to P39.9 billion or 2.7 times oversubscription.

The BTr fully awarded P5 billion for the three-month papers which fetched an average rate of 5.140 percent, up from 4.996 percent recorded in the previous auction.

The short-term debt papers were more than twice oversubscribed at P13.36 billion in total bids.

However, the BTr awarded a higher amount of P7 billion for the six-month papers as total bids reached  P14.36 billion, nearly triple the initial offer of P5 billion.

The debt papers fetched an average rate of 5.578 percent, higher than the 5.267 percent seen in the last auction.

Risk aversion

Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, said the higher T-bill rates signaled investors' plan to maximize returns on investment amid prospects of less ideal inflation and high policy rate of the Bangko Sentral ng Pilipinas.

"The T-bill average auction yields corrected higher for the second straight auction, after the sharp declines on 28 November," he said.

"This came after recent signals of no local policy rate cut soon and inflation is not yet out of the woods," Ricafort continued.