Yields on Treasury bills (T-bills) rose during the latest auction, driven by a spike in inflation and a disappointing first-quarter GDP. The Bureau of the Treasury (BTr) raised P28.3 billion from its P32-billion target, underselling its offering.
Only the 91-day T-bill was fully awarded, while the 182-day and 364-day securities saw partial allocation. The auction drew a total of P44.9 billion in bids, indicating a demand that was 1.4 times oversubscribed.
Inflation and Economic Growth Concerns
This marks the third consecutive week of rising yields, as investors react to economic data showing April's inflation surged to 7.2 percent, the highest in three years. Additionally, the GDP growth rate slowed to 2.8 percent.
Market analysts attribute the rising yields to pressures from a hawkish central bank stance, as inflation remains well above the desired 2 to 4 percent range. The Philippine peso has also weakened, trading at 61 to the US dollar.
Global Factors Influencing Markets
The ongoing conflict in the Middle East has further complicated market conditions. Michael Ricafor, chief economist at Rizal Commercial Banking Corp, highlighted that recent geopolitical tensions have contributed to rising global crude oil prices, impacting local T-bill rates.
As we navigate these challenging times, the Bureau of the Treasury remains committed to upholding market stability.
Sharon Almanza, National Treasurer
The average yield for the 91-day T-bill reached 4.850 percent, up from 4.711 percent. The 182-day and 364-day bills also saw increases, settling at 5.270 percent and 5.719 percent, respectively.
The BTr has expressed its commitment to maintain a resilient government securities market amidst ongoing global uncertainties.