T-bill rates rise following BSP interest hike 

The rates of Treasury bills (T-bills) rose on Monday following the surprise rate hike in the Bangko Sentral ng Pilipinas’ (BSP) key rates last week, according to a report by Philippine News Agency.

The average rate of 91-day T-bill inched up to 2.323 percent, the 182-day’s to 3.083 percent, and the 364-day’s to 3.258 percent.

These were at 1.876 percent, 2.907 percent, and 2.981 percent for the three-month, six-month, and one-year papers during the auction last July 11.

“Markets asked for higher rates following (the) 75 bps (basis points) off-cycle hike by BSP,” National Treasurer Rosalia de Leon told journalists in a Viber message.

The rise in the BSP’s key rates last week was made after the second 25 basis points jump in the central bank’s policy rates this year, which was made during the policy-making Monetary Board’s rate-setting meet last June 23.

The next MB meeting is scheduled on Aug. 18.

BSP Governor Felipe Medalla said the off-cycle rate adjustment was made to address mounting inflationary risks and anchor inflation expectations.

The rate hike was made after the US reported further acceleration of its consumer price index (CPI) last June to 9.1 percent, the highest since November 1981.

Analysts thus forecast more aggressive increase in the Federal Reserve’s key rates later this month.

The Fed Funds Rates have been increased by a total of 150 basis points to date –25 basis points last March, 50 basis points last May, and 75 basis points last June.

“Another 50 bps is also now being put on the table as Fed turns more aggressive with possible full percentage point to be delivered during (the) next FOMC (Federal Open Market Committee),” De Leon said, adding that the 50 basis points rate increase forecast is for the BSP.