THE GOVERNMENT fully awarded P15 billion worth of Treasury bill (T-bills) on Monday, Sept. 3, even as yields grew across the board over expectations that August inflation data to be released on Wednesday may have accelerated further.
The Bureau of the Treasury (BTr) raised P15 billion as programmed from the auction on Monday, with total tenders reaching nearly twice as much the offer at P27.5 billion.
Broken down, the BTr awarded P4 billion as programmed in the 91-day debt notes that saw tenders reaching as much as P6.225 billion, with average yields at 0.7 basis points higher to 3.225% from 3.218% in the previous auction.
Before Monday’s auction, the secondary market quoted the government securities lower at 3.2137%.
A trader said that the greater volume of bids in the shorter-dated securities shows that interest rates are likely to increase further, which is also supported by similar moves by the US Federal Reserve.
“Nobody wants the one year. The expectation is they will hike again. You can see a lot of pooled funds more of in the middle. Ideally, it should be in the three months, but the yields are not that attractive as the six months,” she said in a phone interview.
“Even in the US they will also hike. So because of the tightening of rates widely expected in September with the Fed, and for us, it’s more anticipated. So the volume is more focused on the six months. Nag play safe sila,” she added.
The government will release August inflation data on Wednesday, where a BusinessWorld poll showed that it is likely to stand at 5.9%, faster than the 5.7% in July and 2.6% in August last year.
The BSP meanwhile forecasts that it could be in the middle of the 5.5-6.2% range. — Elijah Joseph C. Tubayan