T-bill rates ease as BSP affirms dovish bias
Yields on short-dated local debts of the government fell during Monday’s sale of Treasury bills (T-bills), allowing the state to borrow its target amount of debt at lower costs.
The Bureau of the Treasury (BTr) raised P25 billion, as planned, via T-bills, auction results showed.
The offering was 3.8 times oversubscribed, attracting P94.9 billion in total tenders.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said T-bill rates fell after Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. had reiterated his dovish bias by saying that two additional rate cuts are “quite likely” this year.
“The local inflation data improved to the slowest in nearly six years, considered benign and could still support the dovish signals recently by local monetary authorities,” Ricafort said.
The BTr said the 91-day T-bills fetched an average rate of 5.287 percent, down from the previous week’s 5.318 percent.
The average yield for the 182-day debt paper declined to 5.506 percent, from 5.535 percent before.
Lastly, local creditors sought an average rate of 5.612 percent for 364-day bills, cheaper than the last auction’s 5.637 percent.
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.
