The government raised P19.23 billion from an offering of Treasury bills on Monday as yields climbed to their highest levels in up to five months following a surge in global crude prices.
The Bureau of the Treasury made a partial award of the P27 billion on offer even as total tenders reached P36.79 billion. The auction ended 1.4 times oversubscribed, but demand for the longest tenor remained thin.
The committee awarded P8.71 billion in 91-day T-bills and P5.73 billion in 182-day debt. These tenors attracted bids of P18.13 billion and P11.30 billion, respectively. Average rates for the 91-day and 182-day bills settled at 4.900 percent and 4.948 percent.
For the 364-day debt, the government awarded P4.79 billion out of P7.36 billion in total tenders. Unlike the shorter tenors, demand for the one-year paper fell short of the original P9 billion offering, fetching an average rate of 5.066 percent.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said average auction yields rose for a third straight week to hit their highest levels in three to five months. He said the upward trend began alongside the conflict in the Middle East.
The rise in yields followed a weekly increase of 0.26 to 0.36 percentage point in comparable short-term peso Bloomberg valuation service (BVAL) rates. This tracked global crude oil prices which have reached nearly four-year highs due to supply chain risks.
“[This was] despite plans for record use of oil reserves, as higher global crude oil prices could lead to higher local fuel pump prices, higher inflation and inflation expectations, and slower economic growth,” Ricafort said.
