T-bill rates fall on high demand, vax program

T-bill rates fall on high demand, vax program

MANILA – The rates of treasury bills (T-bills) slipped across the board on Monday partly due to the positive effects of the government’s coronavirus disease 2019 (Covid-19) vaccination program, National Treasurer Rosalia de Leon said.

The average rate of the 91-day paper declined to 1.176 percent, the 181-day paper to 1.422 percent, and the 364-day paper to 1.649 percent.

These were at 1.235 percent, 1.472 percent and 1.723 percent for the three-month, six-month, and one-year paper during the auction last May 31.

The Bureau of the Treasury (BTr) offered all the tenors for PHP5 billion each but doubled the awarded volume of non-competitive bids for all due to high bids, resulting in PHP7 billion awards each.

Tenders for the three-month paper reached PHP26.359 billion while it amounted to PHP28.86 billion for the six-month paper and PHP37.3 billion for the one-year paper.

“Rates declined with steady inflation and good progress on vaccination,” de Leon told journalists in a Viber message.

For one, the rate of price increases last May remained at 4.5 percent for the third consecutive month, bringing the year-to-date average to 4.4 percent.

The five-month average is, however, still above the government’s 2-4 percent target band for this year until 2024.

De Leon said the lower-than-expected non-farm payroll figure in the US last May also factored into the drop in T-bill rates as this hampers any “taper action from Fed.”

Last May, the US economy registered 559,000 new jobs, higher than the upwardly revised 278,000 in the previous month but lower than the 650,000 projection.

“Liquidity further boosted with about PHP34 billion maturities this week and redemption of PHP131 billion RTB (retail treasury bond) on June 13,” she added. (PNA)

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