T-bill rates mostly up amid fragile Israel-Iran truce
The Marcos administration borrowed at higher cost during Monday’s sale of short-dated Treasury bills (T-bills) as markets remained on edge amid a fragile ceasefire between Israel and Iran.
Auction results showed the Bureau of the Treasury (BTr) had raised P28.4 billion via sale of T-bills, bigger than its original plan to borrow P25 billion.
The offering was 3.5 times oversubscribed after attracting P87.5 billion in total demand. But Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said creditors still asked for a higher rate amid a delicate truce between Israel and Iran.
“The Treasury bill average auction yields were mostly slightly higher amid the net increase in global crude oil prices since the 12-day Israel-Iran attacks,” Ricafort said, adding that these factors were “tempered” by the tentative ceasefire announced by US President Donald Trump in late June.
Meanwhile, a trader said there was still a healthy appetite for short-dated government debt securities. “[There’s] still steady demand as it offers higher yield compared to the shorter BSP facilities, at least to those who have access to both products,” the trader said.
The BTr said the average rate for the 91-day debt paper was unchanged at 5.526 percent.
But creditors sought an average yield of 5.618 percent for the 182-day T-bill, up from 5.607 percent last week.
Lastly, the 364-day debt note fetched an average rate of 5.656 percent, more expensive than the 5.651 percent recorded in the previous auction.
This year, the government is planning to borrow P2.6 trillion from local and foreign sources to plug a budget hole amounting to P1.6 trillion.
