T-bills’ rates swing up amid conflict

The Bureau of the Treasury (BTr) upsized its award of Treasury bills (T-bills) to P26.7 billion from P25 billion on Monday, despite partially higher interest rates amid concerns about higher oil prices following Iranian attacks against Israel.

BTr auctioned 91-day, 182-day and 364-day T-bills which attracted total bids amounting to P74.2 billion or three times bigger than the initial total offer.

The Treasury lowered its award for the three-month debt papers to P6.5 billion from P8 billion, as their average rate rose to 5.459 percent from the 5.451 percent recorded on 9 June.

However, BTr increased its award for the six-month papers to P11.2 billion from P8 billion as their average rate slightly eased to 5.523 percent from 5.524 percent in the last week’s auction.

Lastly, BTr maintained its offer for the one-year papers at P9 billion as their average rate inched up to 5.657 percent from 5.656 percent.

Import costs pick up

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the mixed T-bills’ rates reflected investor concerns on higher global oil prices following Iran’s missile attacks against Israel last week.

“This could lead to some pickup in importation costs and overall inflation,” he said.

Ricafort said the foreign exchange rate already showed some upside risk to local inflation as the peso weakened against the US dollar to P56.415 per $1 on Monday from P56.21/$1 last Friday based on data from the Bankers Association of the Philippines.

“The US dollar-peso exchange rate reached a new high in 1.5 months or since April 24, 2025,” he shared.

Ricafort added that investors possibly anticipated a slower reduction of interest rates by the Bangko Sentral ng Pilipinas and the US Federal Reserve in the near term due to the aforementioned inflationary risks.

The economist shared that analysts now project smaller cuts toward 48 basis points in the remaining period of the year compared to their initial estimate of 50 basis points.

Economists said the local central bank could consider matching the moves of the Federal Reserve to keep healthy levels of foreign exchange and investments.