The Bureau of the Treasury (BTr) raised its award of Treasury bills (T-bills) to P28 billion from P22 billion during its auction on Monday despite mostly increasing rates after a three-week decline due to the inflationary risks from the implementation of Trump’s tariffs in early April.

The BTr auctioned off 91-day, 182-day, and 364-day T-bills which fetched total bids amounting to P67.2 billion or 3.1 times oversubscription.

The Treasury awarded P7 billion for the three-month debt papers which fetched an average rate of 5.157 percent, up from 5.118 percent recorded last 17 March.

The BTr awarded P9.8 billion for the six-month papers which posted an average rate of 5.554 percent, higher than the 5.496 percent seen in the last week’s auction.

Last, the BTr awarded P11.2 billion for the one-year papers which fetched an average rate of 5.681 percent, down from 5.697 percent recorded in the previous auction.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the T-bills’ rates mostly rose as investors aimed to maximize elevated interest rates amid US President Donald Trump’s push for high tariffs on Canadian, Mexican, and Chinese exports to the United States.

Trump announced to implement over 10 percent tariffs on imports from the three countries on 2 April.

“This could lead to slower US economic growth and higher US inflation or stagflation that could potentially lead to fewer Federal Reserve’s rate cuts,” Ricafort said.

Inflation review up

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said the local Monetary Board will be analyzing mainly the local inflation in deciding whether to ease its policy rate for lenders.

He said the BSP Monetary Board might ease its rate if local inflation declines further.

According to the Philippine Statistics Authority, overall inflation last month hit 2.1 percent, the lowest since October 2024, due to cheaper food, fuels and housing rentals.

However, Remolona cautioned that central bankers around the world have become more wary due to Trump’s tariffs.

“So far our measures of policy uncertainty have spiked. We’re all trying to figure out what to do,” Remolona said as he shared insights from 59 other central bank governors who attended a meeting by the Bank for International Settlements.

“When it comes to trade policies, the inflation impact has been higher since the 1960s,” he added.

Given the inflationary risks, the Monetary Board decided to maintain the policy rate at 5.75 percent last month after reducing it by a total of 75 basis points in 2024.

Ricafort said local inflation might still remain low which could support lower BSP policy rates due to low global oil prices.

He said this outlook was reflected in the decline of the average rate of the 364-day papers.

“Global crude oil prices corrected slightly higher recently to two-week highs, but were still among 3.5-month lows,” he said.

“Investors must have again anticipated possible local policy rate cuts of a total of 50 or 75 basis points this year,” Ricafort continued.