T-bill, bond rates may climb on BSP hike bets - BusinessWorld Online

BW FILE PHOTO RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be offered this week could climb further, with yields on long tenors likely to breach 8% as the Bangko Sentral ng Pilipinas (BSP) chief left the door open to an off-cycle hike to temper inflation risks.The Bureau of the Treasury (BTr) will auction off up to P38 billion in T-bills on Monday, or P12 billion to P15 billion in 91-day papers, P10 billion to P13 billion in 182-day securities, and P7 billion to P10 billion in 364-day debt.

On Tuesday, the government is targeting to raise up to P50 billion from a dual-tenor T-bond offering, or P20 billion to P30 billion in reissued seven-year bonds with a remaining life of four years and two months, and P10 billion to P20 billion in 10-year notes with a remaining life of nine years and nine months.T-bill and T-bond yields could track the week-on-week increase in most secondary market rates after the BSP chief said they are considering an off-cycle rate hike, Rizal Commercial Banking Corp.

Chief Economist Michael L.Ricafort said in a Viber message.

“Locally, the BSP governor expressed the possibility of an off-cycle hike, but this was already priced in by the market.What’s crucial is [this] week’s 10-year auction as it is expected to breach 8% since we think that the BTr can no longer afford to reject,” a trader said in an e-mail. The trader said the 10-year bonds could fetch rates from 7.95% to 8.25%.

At the secondary market on Friday, yields on the 91-, 182-, and 364-day T-bills rose by 14.52 basis points (bps), 16.79 bps, and 3.94 bps week on week to close at 5.0563%, 5.4593%, and 5.9534%, respectively, according to the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System website.For its part, the seven-year bond climbed by 2.84 bps week on week to yield 7.595%, while the four-year paper, the tenor closest to the remaining life of the reissue...