THE BANGKO Sentral ng Pilipinas (BSP) raised P130 billion as planned via its offer of short-term bills on Monday, even as accepted rates rose amid concerns over Russia’s invasion of Ukraine and its impact on oil prices.
The BSP’s 28-day securities were oversubscribed as the offer fetched bids amounting to P135.4 billion. However, this was lower than the P139.75 billion in tenders seen a week earlier.
Accepted rates for the papers were from 1.7% to 2.2475%, rising from the 1.64% to 2.08% in the prior auction. This caused the average rate of the one-month bills to rise by 19.21 basis points to 1.9211% from 1.729% previously.
The usual Friday auction for the bills was done on Monday as Feb. 25 was a special non-working holiday to commemorate the anniversary of the People Power Revolution.
Accepted yields on the BSP bills increased on Monday amid uncertainties caused by the Russia-Ukraine conflict and concerns over its impact on oil prices, which could affect inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
Russia’s political and economic isolation deepened on Monday as its forces met stiff resistance in Ukraine’s capital and other cities in the biggest assault on a European state since World War II, Reuters reported.
President Vladimir Putin put Russia’s nuclear deterrent on high alert on Sunday in the face of a barrage of Western-led reprisals for his war on Ukraine, which said it had repelled Russian ground forces’ attempts to capture urban centers.
Blasts were heard before dawn on Monday in the capital of Kyiv and in the major city of Kharkiv, Ukrainian authorities said, while diplomatic maneuvering continued.
Ukraine said negotiations with Moscow without preconditions would be held at the Belarusian-Ukrainian border. Russian news agency Tass cited an unidentified source as saying the talks would start on Monday morning.
US President Joseph R. Biden will host a call with allies and partners on Monday to coordinate a united response, the White House said.
Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbor’s military capabilities and capture what it regards as dangerous nationalists.
Brent on Thursday went beyond $100 a barrel for the first time since 2014, Reuters reported. On Friday, April Brent crude futures declined by 1.2% to $97.93 per barrel after reaching a high of $101.99, while the US West Texas Intermediate crude dropped $1.22 or 1.3% to $91.59 per barrel following a high of $95.64.
A BusinessWorld poll of 15 analysts yielded a median estimate of 3.3% for February inflation, which is within the 2-4% target by the BSP. If realized, this will be faster than the 3% in January.
Analysts said the spike in global oil prices likely caused faster inflation in February.
Latest data from the Department of Energy showed gasoline, diesel and kerosene have increased by P8.75, P10.85, and P9.55 per liter, respectively, since the year started. — L.W.T. Noble with Reuters