Gov’t raises P30B from T-bonds as yields slide
The Bureau of the Treasury was able to raise P30 billion as planned from long-dated local debt at Tuesday’s Treasury bond (T-bond) auction.
This, as yields declined a week ahead of the central bank’s rate-setting meeting. Investors are expecting one final reduction.
The auction involved reissued seven-year T-bonds with a remaining life of seven years and six months.
Total demand reached P80.29 billion, which was 2.6 times the original offer size.
As seen in recent auctions, strong demand pushed yields lower as investors moved to lock in returns ahead of a possible 25-basis-point rate cut on Feb. 19.
The average yield for the seven-year T-bond settled at 5.859 percent, down from the 5.934 percent recorded in the previous auction of the same tenor last Jan. 20.
Even so, the auction yield remained higher than the 5.8039 percent quoted for the comparable tenor in the secondary market as of Feb. 9. This was the lowest since October 2024.
“The average auction yields went down after dovish signals on a possible 25-basis-point Bangko Sentral ng Pilipinas (BSP) rate cut, amid still benign inflation and relatively weaker-than-expected local economic growth data,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
Inflation accelerated to 2 percent in January, returning to the official 2 percent to 4 percent target range for the first time since February 2025.
The reading, however, remains benign, even as the economy posted a disappointing full-year growth of 4.4 percent in 2025.
But the BSP has since signaled that its easing cycle is nearing its end.
