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Higher T-bill rates seen

The BTr’s auction for T-bills, originally scheduled on Monday, was moved to Tuesday following the phreatic eruption of Taal volcano.

Joshua Lao

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Treasury bill (T-bill) rates were seen moving higher at this week’s bidding sale due to a mix of local and external price pressures, various private sector economists said.

ING Bank senior economist Nicholas Mapa forecasts higher rates for the Treasury’s short-term IOU amid expectations of a higher inflation print this year.

“T-bills will likely see yields inch higher given expectations of higher inflation in 2020,” Mapa said.

Security Bank head for wholesale Treasury sales, Carlyn Therese, Dulay shared the sentiment, saying higher secondary market rates at the moment will likely help push T-bill rates higher.

“Expect T-bills to move slightly higher (this) week as it plays catchup with secondary bond market movement, which moved by as much as 20 to 30 basis points. Increased geopolitical noise caused a wide risk-off tone which led traders to trim positions,” Dulay said.

At the Rizal Commercial Banking Corporation, lead economist Michael Ricafort casted a similar outlook, saying the rate increase could be minimal.

“T-bill yields could go up slightly or at least steady after the week-on-week increase in short-term peso BVAL yields, mostly by less than 10 basis points,” Ricafort said in a text message.

On external factors, short-term US T-bill yields (were) also slightly higher week-on-week after the improvement in global market risk appetite as the US-Iran tensions eased even as global oil prices eased to near 1-month lows, he added.

The BTr’s auction for T-bills, originally scheduled on Monday, was moved to Tuesday following the phreatic eruption of Taal volcano, which caused widespread ashfall reaching Metro Manila.
Latest rates for the 91-, 182- and 364-day benchmarks stood at 3.179 percent, 3.435 percent and 3.624 percent, respectively.

Previously, the Treasury decided to increase the frequency of the sale of T-bills, effectively increasing the offer volume to P240 billion in the first quarter 2020 from only P100 billion a quarter earlier.

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