Philippine Treasury bill yields rise amid cautious investor appetite

THE BUREAU of the Treasury raised P19.2 billion from its auction of 91-, 182- and 364-day Treasury bills, as yields climbed amid continued caution over the Middle East war and rising oil prices.

The government offered P27 billion across the three tenors, receiving total bids of P36.8 billion, higher than last week’s P31.5 billion.

Despite the strong interest, the 91-day bill collected P8.71 billion, slightly below its P9-billion target, with an average yield of 4.9%, up 22 basis points from the previous week.

The 182-day paper raised P5.73 billion at a 4.95% yield, while the 364-day bill fetched P4.79 billion with an average yield of 5.07%, both reflecting similar week-on-week increases. Accepted yields ranged from 4.75% to 5.1% across tenors.

Before Monday’s auction, secondary market quotes placed the 91-, 182- and 364-day bills at 4.86%, 4.85% and 5.03%, according to PHP Bloomberg Valuation Service reference rates.

“The Middle East conflict continues to dampen investor appetite,” a market trader said, adding that low liquidity was expected as investors remained cautious.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., in a Viber message said higher oil prices could fuel inflation and slow economic growth.

Arsenio M. Balisacan, secretary of the Department of Economy, Planning, and Development, earlier said inflation could exceed 7% and growth could slow by up to 0.3 percentage point if oil shocks intensify.

The Treasury plans to offer P20 billion to P30 billion in reissued 10-year bonds this week, with a remaining life of nine years and 11 months.

For March, the government aims to raise P248 billion from the domestic market — P108 billion in bills and P140 billion in bonds.

The proceeds support the country’s fiscal deficit, capped at P1.647 trillion or 5.3% of gross domestic product for the year. The government relies on both local and foreign borrowing to fund its spending plans. — Aaron Michael C. Sy