Treasury bills fetched higher rates Monday, triggered by mounting uncertainties on the policies of newly-elected US President Donald Trump and the expected interest rates hike by the Federal Reserve in December.
The Bureau of the Treasury’s auction committee decided for a full award for the 91-day T-bills while partially awarding the 182-day debt instruments and rejecting the bids for the 364-day securities.
The 91-day T-bills fetched an average rate of 1.484 percent, up from 1.281 percent on Oct. 17, while the 182-day T-bills had an average rate of 1.809 percent, higher than 1.505 percent previously.
The 91-day P8 billion bills on the auction block were oversubscribed, with total tenders reaching P19.29 billion.
The 182-day P6 billion papers were also oversubscribed with total tenders of P6.8 billion but the committee awarded only P4.4 billion.
“Meanwhile, bids for the 364-day T-bills were rejected due to limited demand and higher-than-expected rates,” the committee said. The previous rate for the 364-day T-bills was 1.88 percent.
The auction fetched P30.55 billion in total tenders, roughly a third of which were for the 91-day T-bills. The committee was able to award P10.4 billion for the P20 billion total offer.
Analysts predicted higher rates in T-bills as the domestic financial market was seen tracking yields of US bonds in the wake of the unexpected results of the US election last week.
Global bond yields increased for five consecutive days on Friday as investors anticipated Trump’s policies. Trump’s policies include lower tax rates and infrastructure spending to boost the US economy.
The last time the Fed raised its rates was in December 2015.
