HIGHER inflation expectations pushed rates up across the board on Monday’s auction of Treasury Bills (T-bills).
Despite the uptick, the Bureau of the Treasury still fully awarded P15 billion in T-bills.
The auction ended up nearly four times oversubscribed as it attracted P56.36 billion in total submitted bids.
National Treasurer Rosalia V. De Leon told reporters that upward movement in rates can be attributed to the expected rise in inflation.
However, De Leon pointed out that the rates fetched by debt papers with longer tenors, especially the 182-day and 364-day T-bills, did not move that much.
The Bangko Sentral ng Pilipinas (BSP) earlier said inflation is expected to average 4.4 percent this year, an upward adjustment from the 4.1 percent in August.
The inflation accelerated to 4.9 percent in August from 4 percent in July. This is the highest inflation recorded since January 2019. With the August inflation, the country’s average 8-month inflation rate stood at 4.4 percent.
The BSP revised upwards its inflation forecast from 3.1 percent to 3.3 percent for 2022. For 2023, inflation is expected to average at 3.2 percent from the earlier 3.1 percent the BSP projected.
The 91-day T-bills’ average rate was capped at 1.085 percent, rising by 2.5 basis points from the previous auction’s 1.06 percent. Tenders for the tenor reached P13 billion.
Meanwhile, the 182-day T-bills fetched an average rate of 1.391 percent, higher by 0.6 basis points from 1.385 percent. Bids for the security amounted to P22.42 billion.
As for the 364-day T-bills, the average rate stood at 1.584 percent. This was a slight increase from 1.582 percent. The debt paper registered P20.93 billion in bids.
For this month, the Treasury is aiming to raise P200 billion from the local debt market.
This year, the national government programmed to borrow a total of P3.1-trillion, most of which is expected to be raised from the local debt market.
The government borrows to meet its spending requirements as well as to finance its budget deficit.
As of end-August this year, the national government’s outstanding debt has hit a new record-high of P11.64 trillion, up by more than a fifth from P9.62 trillion a year ago.