Treasury bill yields rise, increasing borrowing costs

Yields on short-dated government Treasury bills (T-bills) increased on Monday after three weeks of decline. Investors are awaiting details on tariff actions from U.S. President Donald Trump, which has created some market uncertainty. The Bureau of the Treasury (BTr) was able to increase its T-bill offering, raising a total of 28 billion pesos instead of the planned 22 billion pesos. There was strong demand, with total bids reaching 67.2 billion pesos, more than three times the amount offered. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted the rise in rates was influenced by concerns over Trump's upcoming tariffs. These could slow U.S. economic growth and lead to higher inflation, which might affect future rate cuts by the Federal Reserve. In the latest auction, the 91-day T-bill had an average rate of 5.157%, higher than the previous rate of 5.118%. The 182-day T-bill rose to an average yield of 5.554%, up from 5.496%. The 364-day T-bill saw a slight decrease to 5.681% from 5.697%. This year, the Marcos administration plans to borrow 2.55 trillion pesos to fill a budget deficit of 1.54 trillion pesos, which is about 5.3% of the country's GDP. The government aims to raise 507.41 billion pesos from foreign sources and 2.04 trillion pesos domestically through various means, including T-bills and long-term Treasury bonds.