THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday even as rates inched up across-the-board due to expectations of a pause in monetary easing.

The Bureau of the Treasury (BTr) raised P20 billion in T-bills as planned on Monday out of tenders worth P68.872 billion, making the offer more than three times oversubscribed.

The BTr fully awarded P5 billion in 91-day T-bills out of total bids worth P15.904 billion. The average rate for the three-month papers inched up 3.3 basis points (bps) to 2.068% from the 2.035% fetched in the auction last week.

It also awarded P5 billion as programmed in 182-day papers out of P11.685 billion in bids. The six-month instruments yielded an average rate of 2.159%, 5.8 bps higher than 2.101% previously.

The BTr likewise made a full award of the P10 billion in 364-day T-bills on offer which attracted tenders worth P41.283 billion. The average rate for the one-year papers also went up 5.8 bps to 2.408% from 2.35% last week.

National Treasurer Rosalia V. de Leon said they made a full award even as rates inched up since these yields were still below the levels seen at the secondary market.

“Rates (were) slightly higher than previous auction but lower than secondary levels. Again, rates (were) aligned with inflation as investors look for signal from BSP (Bangko Sentral ng Pilipinas),” Ms. De Leon told reporters Monday via Viber.

Headline inflation eased to 2.1% in May from 2.2% in April and 3.2% a year ago amid a decline in prices of food and transportation costs.

This brought the year-to-date average to 2.5%, still within the central bank’s 2-4% target for this year.

A bond trader said market participants are taking a “defensive” position at the moment due to talks of a possible jumbo bond sale and as the “BSP seems to be on hold” on policy easing.

The BSP Monetary Board (MB) will review its policy settings this Thursday.

BSP Governor Benjamin E. Diokno earlier this month signaled that benchmark interest rates will likely be kept at current levels in the meantime as inflation continues to ease.

The MB has already slashed policy rates by a total of 125 bps this year, bringing benchmark rates to record lows. The overnight reverse repurchase rate is currently at 2.75%, while the overnight lending and deposit rates are at 3.25% and 2.25%, respectively.

A BusinessWorld poll held Monday said 11 out of 13 analysts expect the MB to keep benchmark rates steady due to ample liquidity and as they await further moves from the fiscal side.

The government plans to borrow P170 billion from the local market in June: P110 billion via weekly T-bill auctions and the remaining P60 billion in T-bonds to be offered fortnightly. The state borrows to fund its budget deficit which is now seen to hit 8.4% of gross domestic product. — Beatrice M. Laforga