Treasury bill yields were higher at the auction Monday, lifted by the Bangko Sentral ng Pilipinas’ inflation projection for June that suggests monetary authorities could keep interest rates higher for longer.
The BSP projected June inflation—data due on Friday—to settle within the 3.4 percent to 4.2 percent range after rising 3.9 percent in May to higher food and fuel prices, and the depreciation of the peso that makes imported goods more expensive.
At the auction Monday, the average rate of the benchmark 91-day treasury bill rose to 5.686 percent after holding steady at 5.666 percent the past two weeks. Yield on the 183-day bill rose to 5.959 percent from 5.930 percent while the average rate on the 364-day paper climbed to 6.050 percent from 6.031 percent the previous week.
Total tenders for the P20 billion offer—P6.5 billion each for the 91- and 183-day paper, and P7 billion for the 364-day paper—reached P43 billion. This allowed the Bureau of the Treasury to award the entire borrowing program.
The BSP has kept overnight rates unchanged since October at 6.5 percent. The central bank has aggressively raised interest rates since early 2022 to curb inflationary pressure.
