Banks swarm T-bills auction on rate cut bets
The national government exceeded its targeted sale of Treasury bills (T-bill) on Monday as robust demand pulled yields lower, with investors positioning ahead of the fourth-quarter economic growth report this week.
The Bureau of the Treasury (BTr) was able to raise P37.8 billion from short-dated securities, which was greater than the planned issuance of P27 billion.
Auction results showed the offering was met with strong demand on lower yields across the board, attracting P156 billion in total bids. This amount was 5.8 times bigger than the original size of the offer.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said local creditors demanded lower rates in preparation for the release of the 2025 fourth quarter Philippine gross domestic product (GDP) on Jan. 29.
“Treasury bill auction yields were slightly lower again ahead of the latest Philippine GDP data, which could again be softer and justify a possible 25-basis point rate cut on the next Bangko Sentral ng Pilipinas meeting,” he said.
The Marcos administration has projected a 4.7 to 4.8 percent full-year growth for 2025, falling short of the 5.5 to 6.5 percent target band. The subdued projection follows the slump in the third quarter amid fallout from the flood control corruption scandal.
Broken down, rates for the 91-day T-bills averaged 4.666 percent, cheaper than the 4.723 percent seen in the previous auction last Jan.19.
The 182-day paper fetched an average yield of 4.751 percent, lower than the 4.817 percent recorded last week.
Lastly, average yield for the 364-day T-bill was set at 4.827 percent, down from last week’s 4.888 percent.
