June 8, 2021

T-bill rates are falling due to increased demand, and a vaccine campaign is being implemented

Treasury bill (T-bill) rates fell across the board on Monday, owing in part to the government’s coronavirus disease 2019 (Covid-19) immunization campaign, according to National Treasurer Rosalia de Leon.

The 91-day paper’s average rate fell to 1.176 percent, 181-day paper’s to 1.422 percent, and 364-day paper’s to 1.649 percent.

During the auction on May 31, these were 1.235 percent, 1.472 percent, and 1.723 percent for three-month, six-month, and one-year paper, respectively.

The Bureau of the Treasury (BTr) offered all tenors for PHP5 billion apiece, but owing to strong bids, it doubled the amount of non-competitive bids given, resulting in PHP7 billion rewards for each.

Tenders for the three-month paper were PHP26.359 billion, while those for the six-month paper were PHP28.86 billion and those for the one-year paper were PHP37.3 billion.

In a Viber message to media, de Leon said, “Rates dropped with stable inflation and strong progress on immunization.”

For one thing, the annual pace of price rises stayed at 4.5 percent in May, bringing the year-to-date average to 4.4 percent.

However, the five-month average is over the government’s 2-4 percent goal range for this year to 2024.

According to De Leon, the lower-than-expected non-farm payroll statistic in May influenced the decline in T-bill rates since it hampered any “taper action” by the Fed.

The US economy added 559,000 new jobs in May, up from the upwardly revised 278,000 the previous month but below the 650,000 forecast.

“This week’s maturities helped to liquidity, as did the redemption of a PHP131 billion RTB (retail treasury bond) on June 13,” she said.

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