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MANILA – Results were mixed in Monday’s Treasury bills (T-bills) auction as the Bureau of the Treasury (BTr) fully awarded bids for the 364-day T-bills while partially awarding the 91- and 182-day securities.
The auction was 2.5 times oversubscribed, with total tenders reaching PHP38.1 billion.
The BTr raised the PHP11.8 billion of the PHP15 billion offering.
In a comment, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said Treasury bill auction yields were mostly higher week-on-week.
For the 91-day T-bills, this went up 0.374 to 5.598 percent; 182-day tenor, 0.201 to 5.99 percent; 364-day tenor, 0.084 to 6.294 percent.
"Treasury bill yields were higher week-on-week after higher global crude oil prices to new 3.5-month highs that led to the series of local fuel pump prices that could add to inflation pressures as well as the weaker peso exchange rate versus the U.S. dollar that could add to import prices and overall inflation," he said.
Ricafort said auction yields were higher after the recent increase in US Treasury yields and stronger US economic data that supported recent hawkish signals from some Federal Reserve officials.
He said upcoming Treasury bill auction yields would be a function of the possible pause in Fed rates for the rest of 2023, as well as possible Fed rate cuts of at least -1.00 priced in by the markets by end-2023, supported by the easing trend in headline inflation due to higher base effects.
However, Ricafort said this would be offset by higher global crude oil prices that could slow down the easing trend for local headline inflation and the recent storm damage that could also add to inflationary pressures. (PNA)
