MANILA – The Treasury bill (T-bill) rates were little changed on Monday following Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno’s statement on the timing of policy rate adjustment.
The average rate of the 91-day debt paper moved to 1.113 percent, the 182-day to 1.390 percent, and the 364-day to 1.604 percent.
These were at 1.095 percent, 1.391 percent, and 1.587 percent for the three and six-month, and one-year papers during the auction last October 11.
The Bureau of the Treasury (BTr) offered all tenors for PHP5 billion, and the auction committee fully awarded all tenors.
Total tenders for the 91-day paper reached PHP8.68 billion while it amounted to PHP16.868 billion for the six-month paper and PHP10.54 billion for the one-year paper.
The BTr also opened the tap facility window after the auction to offer the one-year paper for PHP3 billion to take advantage of the strong demand for the said tenor.
“Rates moved sideways following (BSP) Gov(ernor’s) statement (of) more harm with early rate hike,” National Treasurer Rosalia de Leon said.
Diokno said that with the rise of inflation rate in many countries worldwide, several central banks have started to raise their key policy rates.
In the case of the Philippines, he attributed the spike in rate of price increases to supply-side factors given the impact of supply issues on pork and several other food items due to weather-related factors and the uptick in global oil prices.
These factors, he added, should be addressed by non-monetary intervention.
Last year, the BSP’s policy-making Monetary Board (MB) slashed the central bank’s key rates by a total of 200 basis points to help address the impact of the pandemic by encouraging lending activities by banks.
This brought the central bank’s overnight reverse repurchase (RRP) rate to record-low 2 percent.
With average inflation in the first nine months of the year at 4.5 percent, higher than the government’s 2 percent to 4-percent target band, real interest rates remain in negative territory.
However, Diokno said there is no hurry to increase the BSP’s key rates.
“To me, the harm that tightening monetary policy too soon exceed(s) the harm of moving too late, given that the Philippine economy is at its nascent state of economic recovery,” he said.
He said the Monetary Board will decide on the appropriate timing of its policy change in “any event based on the evidence at the time of its decision.”
“It won’t be influenced by opinion makers, market analysts or Twitters,” he added. (PNA)
