T-bill rates down for 4th week
Yields on short-dated local debts of the government fell for the fourth straight week during Monday’s sale of Treasury bills (T-bills) amid continued expectations of lower interest rates amid the ongoing easing cycle of the central bank.
This, in turn, allowed the Bureau of the Treasury (BTr) to raise P28.4 billion via T-bills, bigger than the original plan to borrow P25 billion.
The auction was 4.1 times oversubscribed after total bids reached P103.5 billion, prompting the BTr to double the accepted non-competitive bids for the six-month T-bills to P6.8 billion
“Treasury bill average auction yields again mostly slightly lower for the fourth straight week, after the latest dovish signals from Finance Secretary Ralph Recto on possible 50 basis points (bp) BSP rate cuts for the rest of 2025, with the earliest 25-bp cut on the next rate-setting meeting on Aug. 28,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said.
The 91-day T-bill fetched an average rate of 5.388 percent, lower than the 5.422 percent seen in the previous auction.
The average yield for the 182-day debt paper stood at 5.543 percent, cheaper than last week’s 5.566 percent.
Lastly, local creditors sought an average rate of 5.627 percent for the 364-day T-bill, down from 5.631 percent before.
This year, the Marcos administration is planning to borrow P2.6 trillion from local and foreign sources to plug a budget hole amounting to P1.6 trillion, or 5.5 percent of gross domestic product.
The BTr said it would continue to favor onshore sources of debt to mitigate any foreign exchange risks from foreign borrowings.
