By Aaron Michael C. Sy, Reporter
TREASURY BILL and bond rates are expected to end mixed this week ahead of the release of inflation data for May.
T-bill and T-bond rates could follow the mixed week-on-week movements in the secondary market on expectations that Philippine inflation last month eased further, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday — P8 billion each in 91- and 182-day debt and P9 billion in 364-day securities.
On Tuesday, the government will sell P30 billion in reissued seven-year T-bonds with a remaining life of five years and a month.
In the secondary market, the 91-, 182- and 364- day T-bills eased 2.21 basis points (bps), 1.3 bps and 1.45 bps to 5.433%, 5.5968% and 5.7253%, respectively, based on PHP Bloomberg Valuation Service Reference Rates as of May 30 published on the Philippine Dealing System website.
The seven-year bond inched up 0.71 bp to 6.0492%, while the five-year debt added 0.05 bp to 5.8986%.
The T-bonds could fetch a rate of 5.85% to 5.925% on decent demand, a trader said in an e-mailed reply to questions.
Analysts said inflation could have slowed to an over five-year low in May due to a stronger peso and the continued decline in food prices.
It was probably 1.3% last month, according to a median estimate of 17 analysts in a BusinessWorld poll last week — slower than 1.4% in April and 3.9% a year earlier and within the Bangko Sentral ng Pilipinas’ (BSP) 0.9%-1.7% forecast
The Philippine Statistics Authority will release May inflation data on June 5.
Last week, BTr raised P28.6 billion from the T-bills it auctioned off, higher than the P25-billion plan, as total bids reached P84.255 billion.
The oversubscription prompted the auction committee to double its acceptance of noncompetitive bids for the 364-day T-bills to P7.2 billion.
The Treasury borrowed the programmed P8 billion via the 91-day T-bills as tenders reached P25.565 billion. The three-month paper’s average rate eased 4.7 bps to 5.468% from the previous auction. Tenders accepted carried yields of 5.444% to 5.497%.
The government also fully awarded P8 billion in 182-day debt as bids hit P30.275 billion. The average rate of the six-month T-bill was down 6.1 bps to 5.551%, with accepted rates at 5.508% to 5.6%.
The Treasury likewise raised P12.6 billion via the 364-day debt, higher than the P9-billion program, as demand reached P28.415 billion. The average rate of the one-year T-bill slipped 0.8 bp to 5.694%, with bids at 5.65% to 5.704%.
The T-bonds to be sold on Tuesday were last auctioned on April 29, when the government raised P30 billion at an average rate of 5.943%, below the 6.375% coupon.
The BTr is looking to raise P230 billion from the domestic market this month — P100 billion via Treasury bills and P130 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of economic output this year.
