T-bill, bond rates likely mixed ahead of inflation data for May
By Aaron Michael C. Sy, Reporter
TREASURY BILL and bond rates are expected to end mixed this week ahead of the release of inflation data for May.
T-bill and T-bond rates could follow the mixed week-on-week movements in the secondary market on expectations that Philippine inflation last month eased further, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday — P8 billion each in 91- and 182-day debt and P9 billion in 364-day securities.
On Tuesday, the government will sell P30 billion in reissued seven-year T-bonds with a remaining life of five years and a month.
In the secondary market, the 91-, 182- and 364- day T-bills eased 2.21 basis points (bps), 1.3 bps and 1.45 bps to 5.433%, 5.5968% and 5.7253%, respectively, based on PHP Bloomberg Valuation Service Reference Rates as of May 30 published on the Philippine Dealing System website.
The seven-year bond inched up 0.71 bp to 6.0492%, while the five-year debt added 0.05 bp to 5.8986%.
The T-bonds could fetch a rate of 5.85% to 5.925% on decent demand, a trader said in an e-mailed reply to questions.
Analysts said inflation could have slowed to an over five-year low in May due to a stronger peso and the continued decline in food prices.
It was probably 1.3% last month, according to a median estimate of 17 analysts in a BusinessWorld poll last week — slower than 1.4% in April and 3.9% a year earlier and within the Bangko Sentral ng Pilipinas’ (BSP) 0.9%-1.7% forecast
The Philippine Statistics Authority will release May inflation data on June 5.
Last week, BTr raised P28.6 billion from the T-bills it auctioned off, higher than the P25-billion plan, as total bids reached P84.255 billion.
The oversubscription prompted the auction committee to double its acceptance of noncompetitive bids for the 364-day T-bills to P7.2 billion.
The Treasury borrowed the programmed P8 billion via the 91-day T-bills as tenders reached P25.565 billion. The three-month paper’s average rate eased 4.7 bps to 5.468% from the previous auction. Tenders accepted carried yields of 5.444% to 5.497%.
The government also fully awarded P8 billion in 182-day debt as bids hit P30.275 billion. The average rate of the six-month T-bill was down 6.1 bps to 5.551%, with accepted rates at 5.508% to 5.6%.
The Treasury likewise raised P12.6 billion via the 364-day debt, higher than the P9-billion program, as demand reached P28.415 billion. The average rate of the one-year T-bill slipped 0.8 bp to 5.694%, with bids at 5.65% to 5.704%.
The T-bonds to be sold on Tuesday were last auctioned on April 29, when the government raised P30 billion at an average rate of 5.943%, below the 6.375% coupon.
The BTr is looking to raise P230 billion from the domestic market this month — P100 billion via Treasury bills and P130 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of economic output this year.
