T-bill rates rise on high-inflation, low-GDP woes
Yields on Treasury bills (T-bills) rose for the third straight week on Monday’s auction as investors priced in a fresh surge in inflation alongside another period of anemic economic growth amid the Middle East war.
Auction results showed the Bureau of the Treasury (BTr) raised only P28.3 billion of the P32-billion debt sale target—with only the 91-day T-bill fully awarded.
The auction was 1.4 times oversubscribed, translating to P44.9 billion in total tenders.
The 91-day debt note averaged 4.850 percent, higher than the 4.711 percent recorded in the previous auction.
Meanwhile, the 182-day T-bills settled at 5.270 percent, up from 4.964 percent, while the 364-day paper rose to 5.719 percent from 5.377 percent.
The outcome factored in key economic data released last week, including inflation in April surging to a three-year high of 7.2 percent, while first-quarter gross domestic product slowed further to 2.8 percent.
Other market pressures included the hawkish signals from the central bank, as inflation overshot the 2 to 4 percent target range and the continued peso depreciation, which has weakened back to the 61 level against the US dollar.
As it is, the rising yields are still tied to the escalating Middle East war.
“US President Donald Trump announced an indefinite ceasefire until talks with Iran are concluded, but there is lack of progress on negotiations towards a deal to deescalate the war since then, thereby leading to some upward correction in global crude oil prices,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
