Connect with us

Hi, what are you looking for?

News

Treasury bill rates may climb further on Fed bets

BW FILE PHOTO

RATES of Treasury bills (T-bills) could move sideways with an upward bias this week on hawkish signals from the US Federal Reserve chief and as the government concludes its offer of retail bonds.

The Bureau of the Treasury (BTr) will offer P15 billion in T-bills on Tuesday, or P5 billion each in 91-, 182-, and 364-day securities. This will be its last T-bill auction for the month and was moved from the usual Monday schedule due to a holiday on Aug. 19 for National Heroes Day.

There was no announcement of a Treasury bond (T-bond) auction for this week on the BTr’s website amid the government’s ongoing offer of 5.5-year retail Treasury bonds (RTB). The Treasury has yet to release its September borrowing schedule.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rates of the T-bills on offer this week will likely be slightly higher amid expectations of tepid demand as the ongoing RTB offering continues to siphon off liquidity from the market.

Mr. Ricafort said T-bill rates will continue to track secondary market yields.

Meanwhile, traders said T-bill yields could be mixed with an upward bias.

The first trader sees T-bill rates rising by 5-10 basis points (bps) as another 75-bp hike from the Fed is “not completely off the table.”

“The BTr can partially award if they think that the bids are too high,” the first trader said.

“T-bills will likely move mixed, with the rate of the 91-day T-bill moving sideways to 5 bps higher, while the 182- and 364-day T-bills will move 10-20 basis points higher. The market is seen busy book-building for the ongoing RTB offering,” the second trader said.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 2.1447%, 3.2516%, and 3.8085%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

Fed Chair Jerome H. Powell warned in his speech at their annual economic symposium in Jackson Hole, Wyoming on Friday that the United States will see slow economic growth and an increase in unemployment as the central bank continues to raise rates to fight rising inflation.

Mr. Powell said the Fed will raise rates as high as needed and would keep them there “for some time” to bring down inflation.

The Fed next meets to discuss policy on Sept. 20-21. It has raised rates by 225 bps so far since March, including back-to-back 75-bp hikes in June and July.

Meanwhile, the government last week raised an initial P162.72 billion from the price-setting auction for its offer of 5.5-year retail bonds as tenders reached P225.32 billion, or more than seven times the P30-billion plan.

The retail bonds fetched a coupon rate of 5.75%, higher than the 4.875% set for the five-year RTBs offered in March.

The offer period for the peso-denominated debt maturing in 2028 is from Aug. 23 to Sept. 2, while settlement is on Sept. 7.

Last week, the government partially awarded its offer of T-bills, raising P12.02 billion against the P15-billion program despite bids reaching P30.76 billion.

Following the BTr’s cancellation of its scheduled Aug. 23 auction of P35 billion in 5.5-year bonds to make way for the retail bond offer, its T-bill and T-bond borrowing program for the month is now at P180 billion, or P75 billion from T-bills and P105 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.6% of gross domestic product this year. — Diego Gabriel C. Robles

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!

Latest

News

PHILIPPINE STAR/ MICHAEL VARCAS WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global...

News

Buildings are seen along EDSA in Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded...

News

Heavy traffic is seen on the southbound lane of EDSA in Cubao, Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN THE PHILIPPINE auto industry’s...

News

REUTERS THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected...

News

Vendors arrange their goods at a public market in Manila. — PHILIPPINE STAR/ RUSSEL A. PALMA THE ASIAN Development Bank (ADB) is planning to...

Editor’s Pick

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like

News

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...

News

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...

News

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...

News

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...

Disclaimer: Respect Investment.com, 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.