TREASURY BILL RATES may ease this week as investors position for a possible rate cut by the Bangko Sentral ng Pilipinas (BSP) in December.
The Bureau of the Treasury (BTr) will offer P22 billion in T-bills on Monday — P7 billion in 91-day securities and P7.5 billion each in 182- and 364-day debt.
Yields may track the small declines in the secondary market last week after BSP Governor Eli M. Remolona, Jr. signaled that another 25-basis-point (bp) cut is possible next month, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The BSP chief has said that easing might extend into 2026 as widening corruption issues tied to state flood control and infrastructure projects threaten to slow government spending and weigh on growth.
The BSP trimmed rates by 25 bps last month, its fourth straight move, bringing the policy rate to 4.75%. Since August last year, the Monetary Board has lowered borrowing costs by 175 bps. Its final policy meeting for 2025 is set for Dec. 11.
At the secondary market on Friday, yields on the 91-, 182- and 364-day T-bills slipped 2.38 bps, 3.93 bps and 2.3 bps to 4.8676%, 5.0032% and 5.0852%, respectively, based on PHP Bloomberg Valuation Service reference rates as of Nov. 21.
A trader said the absence of a bond auction this week could draw more bidders to the T-bill auction.
Last week, the Treasury raised P25 billion, above its P22-billion program, as demand surged. Total tenders reached P84.015 billion, more than four times the offer.
The 91-day tenor fetched an average of 4.842%, up 2.1 bps from a week earlier, with bids at P26.19 billion. Accepted yields ranged from 4.825% to 4.854%.
For the 182-day paper, the BTr increased the award to P10.5 billion from P7.5 billion after tenders climbed to P29.47 billion. The Treasury also doubled the noncompetitive bucket to P6 billion. The average rate dipped 1.1 bps to 4.97%, with awarded bids at 4.923% and 5%.
The 364-day T-bill raised P7.5 billion as planned, with demand at P28.355 billion. It averaged 5.017%, down 3.7 bps, with accepted yields at 5% to 5.028%.
The Treasury aims to raise P158 billion from the domestic market this month, including P88 billion in T-bills and P70 billion in bonds, to help finance a budget deficit capped at P1.56 trillion or 5.5% of economic output. — Aaron Michael C. Sy
