T-bill rates ease on dovish BSP talk
The government was able to borrow its targeted amount of short-term peso debts during Monday’s sale of Treasury bills (T-bills) as rates fell amid dovish signals from the Bangko Sentral ng Pilipinas (BSP).
Auction results showed the Bureau of the Treasury raised P22 billion via T-bills.
The offering was met with strong demand. Total bids amounted to P97.2 billion, exceeding the original size of the offer by 4.4 times.
That strong investor appetite, along with BSP Governor Eli Remolona Jr.’s signal of further rate cuts in the coming months, helped bring down T-bill rates, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a market commentary.
The 91-day debt paper fetched an average rate of 4.880 percent, down from 4.983 percent previously.
The average rate for the 182-day T-bill stood at 5.072 percent, cheaper than last week’s 5.128 percent.
Lastly, investors asked for an average rate of 5.119 percent for the 364-day debt note, easing from 5.228 percent before.
This year, the government plans to borrow P2.6 trillion from lenders to plug a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of gross domestic product.
The drive is expected to push the debt stock to P17.36 trillion by year’s end.
Fiscal planners say they will continue to favor onshore borrowing to limit exposure to foreign exchange risks.
The Marcos administration has also made clear it is seeking an upgrade to an A-level credit rating, a distinction it hopes to achieve by keeping debt metrics in check while sustaining economic growth.
