The Bureau of the Treasury rejected every bid at Monday’s ₱27 billion Treasury bill auction, as banks demanded yields the government considered excessive, leaving it with nothing raised from the sale.
The auction committee turned away all tenders across the 91-day, 182-day, and 364-day tenors.
The rejection is the latest in a string of borrowing shortfalls. On April 6, the BTr raised ₱22.8 billion against a ₱27 billion target — the fourth straight auction it fell short. On April 13, after the US and Iran declared a ceasefire on April 7, easing investor risk appetite, the BTr raised ₱32.1 billion, above its ₱30 billion target. Negotiations collapsed on April 11, and elevated oil prices have since driven yield demands back up.
Banks are pre-pricing an imminent rate hike after Philippine inflation jumped to 4.1% in March, breaching both the Bangko Sentral ng Pilipinas’s 2%-4% target band and its own forecast range of 3.1%-3.9%. The surge was driven by transport costs, which jumped from -0.3% in February to 9.9% in March as diesel prices rose 59.5% and gasoline climbed 27.3% amid Middle East supply disruptions.
The BSP subsequently revised its full-year 2026 inflation forecast to 5.1%, up from 3.6% — well above the government’s target range.
The BSP’s Monetary Board convenes on April 23, with HSBC analysts forecasting a 25 basis point hike to 4.5% from the current 4.25%. Bank of the Philippine Islands analysts warn that monthly inflation could approach 8% if global oil prices remain above $100 per barrel — driving banks to submit bids that already reflect tighter policy ahead of an official decision.
The full rejection deepens a financing crunch — the government targets ₱364 billion in T-bill sales for the second quarter of 2026, or 29.3% of its ₱2.68 trillion full-year domestic borrowing program.
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