Connect with us

Hi, what are you looking for?


Rates of Treasury bills, bonds to rise as Fed seen to hike further


RATES of government securities on offer this week could climb after minutes of the US Federal Reserve’s latest meeting hinted on less aggressive tightening.

The Bureau of the Treasury (BTr) will auction off P15 billion in Treasury bills (T-bills) on Monday, made up of P5 billion each in 91-, 182-, and 364-day debt papers.

On Tuesday, the BTr will also offer P35 billion in reissued 20-year Treasury bonds (T-bonds) with a remaining life of four years and nine months.

A trader said the T-bills and T-bonds on offer this week could fetch higher yields.

“Our indication for the 91-day T-bills next week will most likely move higher by 5 basis points (bps) while the 182- and 364-papers will move by 10-15 bps,” a trader said in a phone call.

For the 20-year bond, the trader said they expect yields to range between 6.5% and 6.75%.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that T-bill and T-bond yields could move higher amid less hawkish signals from the Fed.

Analysts from UnionBank Economics Research likewise said in a report that investors are pricing in a 50-bp rate hike at the Fed’s Dec. 13-14 policy meeting.

Minutes of the Fed’s policy meeting this month where they delivered a fourth straight 75-bp hike showed a “substantial majority” of policy makers agreed it would soon be appropriate to slow the pace of rate hikes.

The Fed has raised rates by 375 bps since March in its fight to cool inflation. Its next meeting is on Dec. 13-14.

Back home, the Bangko Sentral ng Pilipinas (BSP) has hiked borrowing costs by 300 bps since May to keep in step with the Fed and rein in rising prices.

Mr. Ricafort also noted that global crude oil prices further eased to near two-month lows, which could help ease inflation.

Brent crude futures settled down $1.71 or 2% to trade at $83.63 a barrel while US West Texas Intermediate crude futures were down $1.66 or 2.1% at $76.28 a barrel.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 4.1770%, 4.9237%, and 5.0810%, respectively, based on the PHP BVAL Reference Rates published on the Philippine Dealing System’s website.

Meanwhile, the 20-year paper fetched a yield of 7.6584%, while the five-year debt, the tenor closest to the remaining life of the T-bond on offer this week, was quoted at 6.6618%.

Last week, the government partially awarded the T-bills it auctioned off even as bids reached P29.452 billion, higher than the P15-billion offer.

Broken down, the Treasury borrowed P5 billion as planned via the 91-day securities, with tenders for the tenor reaching P17.371 billion. The average rate of the tenor went down by 8.9 bps to 4.375% from 4.464%, with accepted rates ranging from 4.14% to 4.513%.

Meanwhile, the government raised just P3.25 billion from the 182-day T-bills, even as bids hit P7.11 billion, above the P5-billion program. The six-month paper fetched an average rate of 4.921%, up by 8.3 bps from the 4.838% quoted for the previous week’s partial award, with the Treasury accepting offers with yields from 4.88% to 4.95%.

Lastly, the BTr awarded only P2.3 billion in 364-day debt papers, with demand reaching just P4.971 billion, lower than the P5 billion on the auction block. The average rate of the one-year paper rose by 4.2 bps to 5.142% from 5.1%. Accepted rates ranged from 5.125% to 5.15%.

Meanwhile, the reissued 20-year bonds to be offered on Tuesday were last auctioned off on Nov. 8, where the Treasury raised P30.64 billion, less than the programmed P35 billion, even as total bids reached P41.6 billion.

The bonds were awarded at rates ranging from 6.8% to 7.5%, bringing the average to 7.131% or 146.8 bps lower than the 8.599% quoted for the papers when there was first offered on Sept. 4, 2007 and also 149.4 bps below the issue’s 8.625% coupon.

The Treasury plans to raise P135 billion from the domestic market in December, or P30 billion in T-bills and P105 billion in T-bonds.

The government borrows from local and external sources to help plug a budget deficit capped at 7.6% of gross domestic product this year. — L.M.J.C. Jocson

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



Elon Musk talks about his company’s Starlink project at the Mobile World Congress, Barcelona, Spain, June 30, 2021. — BRISA PALOMAR / PACIFIC PRESS/SIPA...


PHILSTAR FILE PHOTO The National Economic and Development Authority (NEDA) has approved seven “high-impact” projects, ranging from agriculture to transportation, the agency’s top official...


Television (TV) advertising is shifting toward addressable TV, a service that allows advertisers to show different ads to different audiences watching the same program,...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Wayne Janse Van Rensburg, Chief Executive of education company Learndirect talks to Business Matters about the inspiration behind their business, which...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Rokt, the global leader in ecommerce technology, is today announcing a new partnership with Oracle Red Bull Racing, the leading Formula...


PHILSTAR FILE PHOTO By Luisa Maria Jacinta C. Jocson, Reporter The Finance chief on Friday said he would rather improve tax administration to generate...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.