T-Bills tender reach P35.82B

“The National Treasurer noted that while T-bill yields continue to rise at five to 10 basis points.

The Bureau of Treasury (BTr) received a total of P35.82 billion tenders in yesterday’s Treasury bill (T-bills) auction, from the P15.0 billion on offer, or more than twice oversubscribed, the agency said in a statement.

The BTr’s Auction Committee said it decided on a full award of the T-bill offered after receiving a bullish response from banks, which submitted higher-than-offered bids.

“With a healthy market appetite, the 91-, 182 and 364-day T-bill rates settled at an average of 3.261 percent, 4.294 percent and 4.900 percent, respectively. The T-bill auction was more than twice oversubscribed,” the agency said.

National Treasurer Rosalia de Leon said that expectations of a sustained rise of interest rates domestically and abroad explain the banks’ demand for a higher yield.

Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. stated earlier the Monetary Board is considering another rate hike next month to temper the above-target inflation rates. This is on top of the 50 basis points increase in the BSP’s key rates so far this year.

De Leon identified the 4.1 percent Q2 growth in the US economy, based on preliminary reports, as another contributor to the uptick of T-bill rates. This domestic expansion rate is the fastest since 2014.

This report reinforced expectations for sustained growth of the US economy and the increase in the Federal Reserve rates, she said.

The National Treasurer noted that while T-bill yields continue to rise at five to 10 basis points unlike before when it was at around 30 basis points.

“So I think hopefully this is the start also of the plateauing of the (incremental increase) and so, of course, we have to wait for the outturn of inflation for July,” she said.

The Philippine Statistics Authority is scheduled to report the July 2018 inflation report on 7 August.

In the first half of this year, inflation averaged at 4.3 percent, higher than the two to four percent target of the government for this year until 2020.

Meanwhile, De Leon said local finance officials are still studying when to issue its planned Samurai bond as well as the pricing given recent developments and speculations that Bank of Japan will tweak its rates.

Philippine officials have submitted requirements for possible issuance of the yen-denominated Samurai bond, which De Leon earlier said can be issued as early as August this year.

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