MANILA -- Rates of the Philippines’ Treasury bills (T-bills) ended mixed Monday, with the shorter tenors registering drops but demand remained strong.
Rate of the 91-day paper slipped to 3.149 percent from 3.254 percent that the 92-day T-bill fetched during the auction last August 19. The tenor was adjusted a day longer due to a holiday.
The Bureau of the Treasury (BTr) offered this tenor for PHP4 billion and tenders amounted to PHP11.35 billion. The auction committee made a full award.
Average rate of the 182-day T-bill declined to 3.429 percent from the 3.471 percent for the 183-day paper in the previous auction.
Bids amounted to PHP14.62 billion, more than twice the PHP5-billion offer, which was also fully awarded.
Rate of the 364-day paper averaged at 3.659 percent, higher than the 3.636 percent for the 365-day paper in the previous auction.
Tenders reached PHP14.28 billion, more than double the PHP6-billion offer. The auction committee also made a full award for this tenor.
National Treasurer Rosalia de Leon said the outcome of this week’s T-bill auction was expected.
She attributed the auction results to “expected lower inflation for August” with the median rate at 1.8 percent, and to statements by Bangko Sentral ng Pilipinas’ (BSP) Governor Benjamin Diokno about the additional cuts in the central bank rates.
BSP expected that August 2019 inflation rate likely stayed between 1.3 to 2.1 percent due to the combination of lower fuel and rice prices, which were seen to be countered by weaker peso and higher prices of select food items.
Inflation rate last July slowed to 2.4 percent from the previous month’s 2.7 percent, bringing the average to date to 3.3 percent.
Monthly inflation rate in most of this year remained within the government’s 2 to 4-percent target band, although an uptick was registered last May to 3.2 percent from month-ago’s 3 percent.
Monetary officials forecast inflation to remain within target until the rest of the year, with the monthly rates in the second half of the year seen to remain low due to base effects of record-high rates same period last year.
The sustained drop of domestic inflation rate provided the BSP leeway to cut its policy rates by a total of 50 basis points to date after increasing it by 175 basis points last year to help address the elevated inflation rate caused by the supply-side factors, particularly the high prices of select agricultural products like rice. (PNA)
