MANILA – The expected tightening by the United States of its Federal Reserve rates starting March this year in response to the build-up of the Ukraine-Russian tension has interestingly buoyed up the Philippines Treasury bill (T-bill) rates.
The average rate of 91-day debt paper increased to 0.810%, the 182-day paper to 1.066%, and 364-day bill to 1.475% from their previous 0.710%, 1.022% and 1.408%, respectively during their last February 7 auction.
The Bureau of the Treasury (BTr) offered each of the tenors for P5 billion and all of which were fully awarded. Total tenders for the three-month paper reached P13.57 billion while it amounted to P14.79 billion for the six-month paper and P12.874 billion for the one-year tenor.
National Treasurer Rosalia de Leon told journalists in a Viber message that the “rates moved up with heightened concerns on Ukraine and speculations of Fed hiking rates by as much as 50 bps (basis points) in March.”
The Federal Reserve is projected to start hiking key rates by next month to help address the rising inflation rate, which accelerated to its 7.5% four-decade high rate last January.
Tensions are escalating as Russia reportedly deployed more troops at the border with Ukraine, and the US reportedly serving notice to strike back in support of Ukraine.