Treasury bill yields rose across all maturities at Monday’s auction as surging oil prices fueled concerns over inflation and the prospect of further monetary tightening by the Bangko Sentral ng Pilipinas.
The increase in yields came after the US Federal Reserve raised its key interest rates last week to contain inflation, adding to expectations that the BSP could keep monetary policy tighter for longer.
Total tenders for the Treasury bills jumped to P79.07 billion from P71.3 billion a week earlier, reflecting strong demand even as investors sought higher returns.
The Bureau of the Treasury, however, rejected nearly two-thirds of bids for the 91-day paper to temper the rise in yields. Total accepted bids reached P37.07 billion, below the P42 billion on offer, despite higher awards for the 182-day and 364-day securities.
The average rate on the 91-day Treasury bill climbed to 5.431 percent from 5.348 percent, while the 182-day yield rose to 5.821 percent from 5.781 percent.
The rate on the benchmark 364-day paper increased to 6.043 percent from 5.922 percent, pushing the yield above the 6 percent mark as investors priced in higher inflation and interest-rate risks.
The Treasury also offered 35-day cash management bills, which fetched an average rate of 5.124 percent. Only P2.18 billion was accepted from P12.18 billion in tenders.
The auction came as oil prices remained elevated, raising the risk of renewed price pressures in an economy already sensitive to fuel costs.
Higher Treasury yields could also translate into increased government borrowing costs if the market continues to demand greater compensation for inflation and monetary-policy risks.
