Treasury bill yields extended their climb at Monday’s auction as investors demanded higher rates amid expectations of faster inflation and tighter monetary policy.
Demand remained strong, with total tenders reaching P71.9 billion, although this was down from P79.1 billion in the previous auction. The Bureau of the Treasury awarded P39.4 billion, below the P42 billion on offer after rejecting some bids for the 91-day paper.
The average rate on the 91-day Treasury bill rose to 5.535 percent from 5.431 percent in the previous auction. The 182-day paper likewise climbed to 5.862 percent from 5.821 percent, while the rate on the 364-day bill increased to 6.115 percent from 6.043 percent.
The higher yields came as markets weighed the prospect of accelerating inflation, which could constrain the Bangko Sentral ng Pilipinas’ room to ease monetary policy and keep short-term borrowing costs elevated.
Meanwhile, the Treasury also raised P12.4 billion through cash management bills, up from P10 billion last week. The 35-day and 63-day papers were capped at P6.3 billion and P6.1 billion, respectively, with average rates of 5.115 percent and 5.291 percent.
The latest auction underscored the changing rate environment, with investors still willing to lend but demanding more compensation for locking up funds as inflation and monetary-policy risks cloud the outlook.
For the Treasury, that means borrowing remains well supported. It also means the government is paying a little more for that support.
