T-bill and bond rates could rise this week


RATES on government securities could rise this week as secondary market yields climbed despite a slower-than-expected slowdown inflation in October.

The Treasury Office (BTr) plans to raise P15 billion via Treasury bills (T-bills) it will auction off Monday, or 5 billion pesos each in debt securities at 91, 182 and 364 days.

Tuesday the BTr will be offer 35 billion pesos of reissued 10-year Treasury bonds (Treasury bonds) with a remaining term of nine years and eight months.

Public debt rate to be auctioned off This week could follow the slight rise in secondary market yields following the US Federal Reserve’s announcement to start cutting its monthly asset purchases from $ 120 billion to $ 15 billion per month, despiteflation turned out to be weaker than expected, Rizal Commercial Banking Corp. chief economist said. Michael L. Ricafort in a Viber message over the weekend.

He said the three-to-ten-year tenors posted the largest weekly gain, “reversing the downward correction from the previous week as the Fed Fihas finally announced the details of the $ 15 billion cut as widely expected, but an important signal for the market is the Fed’s patient stance ahead of any rate hikes, which has supported market sentiment. “

Fed Chairman Jerome H. Powell said last week they could stay patient and keep rates low to support the economy while the job market remains weak.

At the same time, inflation fell to its lowest level for three months in October amid slower increases in food prices, the Philippines Statistics Authority reported on Friday.

Title inflation came in at 4.6%, slower than the median estimate of 4.9% of 21 analysts in a Business world survey.

October’s figure was slower than September’s 4.8%, but faster than 2.5% a year earlier. Still, it was the third consecutive month inflation exceeded the Bangko Sentral ng Pilipinas (BSP) target of 2-4% for the year. Inflation exceeded the BSP target this year, except in July.

It made the headlinesflation for the FiFirst 10 months at 4.5%, faster than the 4.4% forecast by the central bank for the year.

On the flip side, a bond trader expects higher yields as the market waits for this week’s auction results.

“The Fed’s rate and cut announcements were already integrated because they had been well communicated beforehand,” the trader said in a Viber message.

“What the market is looking for now is how much the BTr will borrow in the next auction after assigning the 5-77 FXTN at higher rates than expected,” the trader said, referring to the auction last week where the government topped up with 35 billion pesos. attribution of reissued the papers at five even as his rate rose.

Bonds, which have a residual term of four years and Fifive months, reached an average rate of 3.762% on Wednesday, up 18.6 basis points (bps) from the 3.576% quoted for grade in the previous auction.

Bids reached P46.65 billion, higher than the offuh but less than the P56.08 billion auction clawed back the last time these debt securities were auctioned off on October 12, where the government awarded a full award.

On Friday in the secondary market, 91-182 and 364 day T-bills were listed at 1.2164%, 1.4427% and 1.655%, respectively, while the 10-year bond closed at 4.9573% , based on the PHL Bloomberg valuation. Reference rates published on the Philippine Dealing System website.

The government made a full allotment of treasury bills which it auctioned off last week, even as rates rose slightly before the release offlration data.

The BTr raised P15 billion as planned via the treasury bills it auctioned off Tuesday like offIt drew 41.78 billion pesos in bids, making it almost 2.8 times oversubscribed.

Broken down, the BTr borrowed 5 billion pesos as planned via 91-day treasury bills from 13.08 billion pesos in the tenders. The three-month debt instrument reached an average rate of 1.13%, 1.1bp higher than the 1.119% quoted in the previous auction.

He also raised the 5 billion pesos scheduled on 182-day treasury bills, as the tenor attracted bids worth 14.94 billion pesos. The average yield on six-month debt stood at 1.395%, up 0.8bp from 1.387%.

Finally, the Treasury made a full allocation of 5 billion pesos of 364-day securities, with demand reaching 13.76 billion pesos. One-year paper reached an average rate of 1.613%, up 0.7bp from 1.606% previously.

Meanwhile, the last time the BTr auctioned off 10-year bonds reissued on offst Tuesday was Sept. 28, when he made a full allotment of 35 billion pesos from 73.59 billion pesos in tenders.

The 10-year note obtained an average rate of 4.689% at this auction, higher than the 4.246% recorded in the previous offering and its coupon rate of 4%.

BTr plans to raise P200 billion from the domestic market in November, or P60 billion via weekly offers of treasury bills and 140 billion pesos of weekly treasury bond auctions.

The government wants to borrow P3 trillion from local and external sources this year to help fund a budget ofFicit reached 9.3% of the country’s gross domestic product. – Jenina P. Ibañez

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