NextGen Day

MANILA – Investors demanded a high yield ahead of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board’s policy meeting on Monday, and bids for Treasury notes (T-bills) were rejected across the board (MB).

If the debt papers had been awarded, the 91-day T-average bill’s rate would have climbed to 1.759 percent, the 182-day to 2.215 percent, and the 364-day to 2.828 percent.

During the May 10 auction, these were 1.531 percent, 2.165 percent, and 2.329 percent for three-month, six-month, and one-year papers, respectively.

All tenors were sold for PHP5 billion by BTr, and the most were oversubscribed.

Tenders for the 91-day T-bill totaled PHP13.304 billion, while the 182-day T-bill received PHP7.327 billion.

Bids for the 364-day T-bill, on the other hand, totaled PHP2.9 billion.

In a Viber message to media, National Treasurer Rosalia de Leon said, “Market remains defensive and (is) bracing for a likely rate hike by the MB with stronger-than-expected first-quarter GDP (gross domestic product) growth.”

The Philippine Statistics Authority reported last week that the domestic economy grew at a faster-than-expected 8.3% in the first three months of the year, up from 7.8% in the previous quarter.

As a result, some analysts expect Philippine monetary authorities to begin raising the central bank’s key rates, which were cut by 200 basis points to a record-low 2% for the overnight reverse repurchase (RRP) rate in 2020 to encourage lending and ensure that economic activity remains robust despite the pandemic.

This comes as inflation continues to rise, climbing to 4.9 percent in April 2022 from 4 percent the previous month.

On Thursday, the BSP’s MB will hold its third rate-setting meeting of the year.

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