The Bureau of the Treasury (BTr) has awarded all tenor buckets in its latest Treasury bills (T-bills) auction on Monday amounting to a total of P15 billion, with market rates within the the Treasury’s internal estimates.
National Treasurer Rosalia V. de Leon told reporters the auction committee decided to fully award the T-bills with a total of P15 billion, with rates for the security seen to have settled within reasonable levels.
“We had a full award for all tenors, at rates that we anticipate and ready to accept,” de Leon noting the bids came after what she called “the very strong pronouncement” of the Central Bank governor last Friday.
“[It was a] really the strong message that he [Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr.], actually of the Monetary Board, delivered about the hike,” de Leon said. She also noted the “strong message” on the possibility of interest-rate hike was “imminent” or was something the market already factored in.
“[The rate hike is] anticipated already [to be done] this August 9 during the policy meeting. [The] very strong action to be taken to be able to bring inflation, temper inflation expectations and bring it back to the inflation path particularly next year,” de Leon said.
The 91-day tenor saw bids as high as P10.431 billion, prompting the BTr to award the full P4 billion on offer with the average annual rate settling at 3.219 percent. This showed a contraction of 7.2 basis points compared to the previous auction rate of 3.291 percent.
Bids for the 182-day tenor reached P8.996 billion with the auction committee awarding the P5 billion on offer with the average annual rate settled at 4.236 percent. This saw an expansion of five basis points compared to the previous auction rate of 4.186 percent.
For the 364-day tenor, the auction committee awarded the full P6 billion with bids reaching P13.489 billion, the average annual rate settled at 4.809 percent. This also showed an increase of 4.2 basis points compared to the 4.767 percent set during the last auction for T-bills.
On Tuesday Espenilla defended moves to tame inflationary pressures, following rising concerns on the ability of monetary authorities to bring inflation back to their target range.
“I think this time he [Espenilla] was very direct to the point. Maybe markets really, they’ve turned deaf ears to the pronouncements of the Monetary Board, so he’s more emphatic this time,” de Leon added.
In the first five months of the year, inflation averaged at 4.3 percent rising to 5.2 percent by June. The BSP targets the inflation level of the country to settle at 2 percent to 4 percent by end-2018.
The current BSP main policy rate stands at 4 percent after the back-to-back hike in the last two meetings. In their June meeting, Espenilla also said “further moves are still on the table” should the inflationary environment warrants action from the BSP.
“On our end, again, it’s really more on our borrowings. And we see that this revenue performance of both the BIR [Bureau of Internal Revenue] and BOC [Bureau of Customs] will be sustained,” de Leon said. “So we are now in a very good position to calibrate our borrowings.”