BSP 28-day bill rate up anew amid hawkish sentiment

BSP 28-day bill rate up anew amid hawkish sentiment

MANILA – Expectations for the sustained rise of interest rates resulted in another increase in the Bangko Sentral ng Pilipinas’ (BSP) 28-day bill yield on Friday.

Data released by the central bank showed that the average rate of the debt securities rose to 6.2647 percent from 6.1740 percent during the auction on December 2

The BSP kept the offer volume at PHP120 billion as demand remained strong after tenders reached PHP161.8 billion. The auction committee made a full award.

BSP Deputy Governor Francisco Dakila Jr., in a statement, said yields accepted in this week’s securities auction “shifted higher but narrowed to a range of 6.1000 to 6.3750 percent.”

“The results of the BSP bill auction reflected market participants’ expectations of continued hawkish sentiment from the BSP following the release of the November CPI (consumer price index) figures,” he said.

The Philippine Statistics Authority (PSA) reported on December 6 a further acceleration in the domestic inflation rate in November 2022, the fastest since November 2008. Inflation in the previous month was at 7.7 percent.

This made economists project another hike in the central bank’s key policy rates even after the latest 75 basis points hike last month, which brought the total increase since last May to 300 basis points.

“Looking ahead, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” Dakila said. (PNA)

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