MANILA — Rates of the Philippines Treasury bills (T-bills) registered mixed results Monday as investors took note of news overseas, particularly the next Federal Reserve chair.
Average rate of the benchmark 91-day T-bill declined to 1.957 percent from 1.958 percent during the auction last October 9.
National Treasurer Rosalia de Leon attributed this drop partly to market players’ decision to wait for the November 3 announcement on who the successor of the Federal Reserve chair Janet Yellen would be.
Another factor is the would-be stance of the soon-to-be Fed chair on key rates, which analysts forecast to be a hike come December, she said.
De Leon also pointed out that demand for the shorter-tenor debt paper remains as shown by the PHP25.465 billion bids, which is more than four times the PHP6 billion offering. The auction committee made a full award for this tenor.
“I think, again, the preference for the short end of the curve and the liquidity is very much around. So everybody is more on a wait-and-see attitude, for now, so more on staying sideways,” she said.
Average rate of the 182-day bill is flat at 2.457 percent.
The Bureau of the Treasury (BTr) offered this tenor for PHP5 billion and tenders reached PHP14.027 billion. The auction committee made a full award for the six-month paper.
On the other hand, rate of the 364-day paper fell to 2.853 percent from the previous auction’s 2.820 percent.
Bids totaled to PHP12.629 billion, more than thrice the PHP4 billion offering. The auction committee awarded PHP4 billion.
De Leon said the uptick of rate for the longest-tenor T-bill is “marginal” and cited the strong demand for the debt paper.
“Based on the survey rates would align five to 10 basis points so what we have seen in the actual auction they stayed on the sideways. And that is expected given that it’s one year,” she said.
“And given the chance of a rate hike in December so I think that is also incorporating that,” she added.