Gov’t scales back T-bill award as yields climb
The Marcos administration reverted to underselling its Treasury bills (T-bills) at Monday’s auction after yields rose for a second straight week ahead of key economic data releases.
Auction results from the Bureau of the Treasury (BTr) showed the government raised P28.01 billion out of the P31-billion program after fully awarding the 91-day T-bill but only partially awarding the 182- and 364-day securities.
Last week, despite rising yields that snapped a two-week decline, the BTr still raised more than planned.
Demand from investors was muted, with the auction only 1.4 times oversubscribed, attracting P44.3 billion in bids.
This comes as April inflation data and first-quarter gross domestic product (GDP) figures are set to be released on May 5 and May 7, respectively—both of which are expected to show some pressure from the continued escalation of the Middle East war and the resulting oil price shock.
The central bank is projecting April inflation to accelerate to between 5.6 percent and 6.4 percent, while the country’s chief economist has said GDP growth would likely fall below the 5-percent to 6-percent target and may struggle to recover from the 3-percent print in the previous quarter.
“Treasury bill average auction yields again mostly corrected higher for the second straight week … ahead of the latest inflation data. Inflation is expected to rise further due to the effects of higher oil prices on the cost of other goods and services,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
Ricafort also pointed to the depreciation of the peso, which recently slid to a record low of 61.75 before trimming losses last Thursday, as a factor behind higher yields.
