THE GOVERNMENT made a partial award of the Treasury bills (T-bills) it offered on Monday as yields rose across all tenors due to hawkish signals from central banks here and abroad.

The Bureau of the Treasury (BTr) raised just P10.581 billion via the T-bills it auctioned off on Monday versus the P15-billion program, even as total bids reached P17.648 billion.

Broken down, the Treasury raised P5 billion as planned via the 92-day T-bills as tenders for the tenor reached P6.677 billion. The average rate of the three-month papers went up by 5.7 basis points (bps) to 6.086% from the 6.029% quoted for the tenor last week, with accepted rates ranging from 5.98% to 6.199%.

Meanwhile, the government made a partial P2.97-billion award of the 183-day securities versus the P5-billion program as bids for the tenor reached just P4.98 billion. The six-month T-bill was quoted at an average rate of 6.144%, up by 6.3 bps from 6.081% the previous week, with accepted rates from 6.02% to 6.2%.

Lastly, the BTr raised just P2.611 billion from the 365-day debt papers out of the P5 billion on the auction block, even as demand reached P5.911 billion. The average rate of the one-year T-bills rose by 5.3 bps to 6.219% from the 6.166% fetched last week. Accepted yields were from 6.11% to 6.25%.

The T-bill tenors auctioned off this week were adjusted from the usual 91-, 182- and 364-day papers due to a holiday.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 6.0886%, 6.0958%, and 6.1301%, respectively, based on PHP Bloomberg Valuation Reference Rates data provided by the Treasury.

The Treasury made a partial award of the T-bills as rates climbed due to hawkish signals from the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP), Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The higher yields today were due to the consistently hawkish remarks by various central banks this month, including the Bangko Sentral ng Pilipinas. This has firmed views of elevated short-term interest rates for a prolonged period,” a trader likewise said in an e-mail.

The BSP may keep its policy rate at a near 16-year high of 6.25% for the rest of the year before it starts easing by early 2024, Finance Secretary and Monetary Board member Benjamin E. Diokno said last week.

The Monetary Board last week kept benchmark interest rates unchanged for a second straight meeting, after raising borrowing costs by 425 bps from May 2022 to March 2023, on expectations of easing inflation.

Headline inflation slowed to 6.1% in May from 6.6% in April. For the first five months, the consumer price index averaged 7.5%, still well above the BSP’s 2-4% target and 5.4% forecast for the year.

Meanwhile, further Fed rate increases are “a pretty good guess” of where the central bank is heading if the economy continues in its current direction, Fed Chair Jerome H. Powell said in remarks on Wednesday to lawmakers on Capitol Hill, Reuters reported.

Mr. Powell said a majority of Fed policy makers see two more quarter-point rate increases as likely by the end of the year.

The Fed paused its aggressive tightening cycle for the first time in its June 13-14 review after hiking for 10 straight meetings by a cumulative 500 bps since March 2022 to a range between 5% and 5.25%.

Monday’s T-bill auction was the last one for June. The Treasury raised P47.989 billion from T-bills this month out of the P60-billion program as it made a full award in just one of the four auctions.

On Tuesday, the BTr will auction off P25 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and two months.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy