Dovish atmosphere pulled T-bill rates down
The government was able to raise its target amount of short-dated local debts during Monday’s sale of Treasury bills (T-bills) after rates mostly fell as investors locked in better rates ahead of further easing moves by the central bank.
Auction results showed the government borrowed P22 billion via T-bills, as planned.
The offering attracted total bids amounting to P97.17 billion, exceeding the original size of the offer by 4.4 times.
“T-bill average auction yields were mostly lower after dovish signals from most US Federal Reserve officials recently would help support possible future Fed rate cuts that could be matched by the Bangko Sentral to maintain healthy interest rate differentials,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said.
The 91-day T-bill fetched an average rate of 4.884 percent, higher than the preceding week’s 4.880 percent.
The average rate for the 182-day debt paper stood at 5.058 percent, down from 5.072 percent before.
2025 borrowings
Lastly, local creditors sought for an average rate of 5.097 percent for the 364-day T-bill, cheaper than 5.119 percent previously.
This year, the government plans to borrow P2.6 trillion from lenders to plug a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of gross domestic product. The drive is expected to push the debt stock to P17.36 trillion by year’s end.
Fiscal planners say they will continue to favor onshore borrowing to limit exposure to foreign exchange risks.
The Marcos administration has also made clear it is seeking an upgrade to an A-level credit rating, a distinction it hopes to achieve by keeping debt metrics in check while sustaining economic growth.
