The average interest rates on treasury bills rose at Monday’s auction, reflecting concerns over inflationary pressures following the release last week of November data, which showed a pick-up in price increases driven by supply bottlenecks caused by recent weather disturbances.
Despite the higher rates, demand for T-bills remained robust, with total bids reaching P56.5 billion—approximately 3.8 times the offered amount of P15 billion. The full amount of P15 billion was awarded across all tenors.
The average rate on the 91-day T-bill increased by a tad to 5.774 percent from 5.630 percent in the same period last year. The yield on the 182-day paper rose slightly to 5.922 percent from 5.905 percent, while the 364-day T-bill saw a modest increase to 5.968 percent from 5.937 percent.
Market participants appear to be adjusting their strategies ahead of the Bangko Sentral ng Pilipinas’ (BSP) expected interest rate cut at its final monetary policy meeting for the year on December 19. This follows expectations that the Federal Reserve may also decide to reduce US rates further. As a result, investors may be positioning themselves to maximize returns on short-term government securities before broader rate cuts take effect.
