NextGen Day

MANILA, Philippines — Concerns about the Ukraine-Russia conflict, as well as higher average domestic inflation forecasts for this and next year, caused Treasury bill (T-bill) rates to rise on Monday.

The 91-day paper’s average rate rose to 0.899 percent, the 182-day paper to 1.157 percent, and the 364-day paper to 1.568 percent.

During the auction on February 14, these were 0.810 percent, 1.066 percent, and 1.475 percent for three-month, six-month, and one-year papers, respectively.

Each tenor was offered for PHP5 billion by the Bureau of the Treasury (BTr), and the auction committee made full awards across the board.

Tenders for the 91-day paper totaled PHP13.314 billion, the 182-day paper was worth PHP11.49 billion, and the 364-day paper was worth PHP11.118 billion.

In a Viber message to media, National Treasurer Rosalia de Leon said, “Rates hiked following (this year’s) upward adjustments for inflation and increasing tension in Ukraine.”

The Bangko Sentral ng Pilipinas (BSP) raised its average inflation forecast for this year from 3.4 percent to 3.7 percent last week, while raising its 2023 forecast from 3.2 percent to 3.3 percent.

Higher local food inflation and worldwide oil costs prompted the revisions, according to monetary authorities.

When asked about the implications of these developments on the March 2022 borrowing program, De Leon said they’ll think about it and factor in the eventual result of the ongoing retail treasury bond (RTB) sale, among other things.

The RTBs will be available for purchase from February 15 to February 28 and are targeted at small investors with a minimum investment of PHP5,000.

“We’ll have to calibrate our March issuance program, including size and tenors, based on RTB results and market appetite in light of the revised inflation projection, Federal Reserve rate action, and developments in Ukraine,” she added.

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