An analysis on the effects of economic indicators on the movements of real interest rates of the Philippine 91-day treasury bill

• Main Authors: Halili, Therese Rose B., Jurado, Jennelyn A., Solitario, Kenneth C., Yu, Ronald Martin L.
• Format: text
• Language: English
• Published: Animo Repository 2007
• Subjects: Treasury bills > Philippines; Treasury bills > Prices > Philippines; Interest rates > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14316
• Institution: De La Salle University

The study analyzed the effects of economic indicators on the movement of the real interest rate of the Philippine 91- Day Treasury Bill. This paper identified which among the selected economic variables significantly affect the real interest rates of the said instrument. In this study, the researchers aimed to (1.) determine through the use of regression the effect of the economic indicators on the real interest rate of the Philippine 91-day Treasury bill, (2.) determine which among the selected economic indicators significantly affect the real interest rate of the Philippine 91-day Treasury bill, (3.) measure through the coefficients of the economic indicators, as evident in the regression equation, the level of effect that each economic indicators have on the movements of the real interest rate of the Philippine 91-day Treasury bill, (4.) establish and use a regression equation in predicting the real interest rate of the Philippine 91-day Treasury bill, and (5.) generate a statistical test that would conclude whether the economic indicators' level of effect on interest rates in other countries is the same as to that of the Philippines. The researchers limited their study to five economic indicators which are the inflation rate, gross national product, money supply, required reserves and dollar peso exchange rate. These variables were chosen based from theories and considerable studies made in the past. The researchers used multiple regression in examining the effects of the mentioned economic indicators to the real interest rate. Results showed that from the five variables chosen, inflation rate and money supply were the significant variables in determining real interest rates.