T-bill rates ease further on dovish BSP signals
Yields on short-term government debt fell again on Monday’s Treasury bill (T-bill) auction as investors priced in dovish central bank signals.
Auction results from the Bureau of the Treasury (BTr) showed strong demand, raising P37.8 billion, which exceeded the original P27-billion offer.
Total bids amounted to P126.6 billion, 4.7 times the size of the original offering. This prompted the BTr to double its acceptance of noncompetitive bids across all tenors to P7.2 billion each.
The 91-day debt paper fetched an average rate of 4.723 percent, down from 4.731 percent previously.
The 182-day T-bill, meanwhile, averaged 4.817 percent, cheaper than the 4.850 percent before.
Lastly, investors asked for an average yield of 4.888 percent for the 364-day debt note, down from 4.916 percent previously.
Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the lower rates again to signals from the Bangko Sentral ng Pilipinas (BSP) of a potential interest rate cut in February ahead of key economic releases.
”If anti-corruption measures and governance reforms are taken seriously, they could serve as the missing link to further boost investor confidence in the economy and financial markets,” Ricafort said.
”Future BSP rate cuts will depend on (US Federal Reserve) Fed policy to maintain healthy interest rate differentials, the stability of the peso exchange rate and benign inflation. Additionally, softer economic data or a slower-than-expected recovery could also justify further monetary easing,” he added.
The powerful Monetary Board’s next meeting is scheduled on Feb. 19.
