T-bill rates fall across the board
The government was able to borrow more than planned at its latest sale of Treasury bills (T-bills) as strong investor demand pushed yields lower across the board amid expectations of additional monetary easing.
Auction results showed the Bureau of the Treasury raised P37.8 billion on Monday, more than the original target of P27 billion.
The offering attracted P113.1 billion in total bids, or 4.2 times the original size of the offering.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said strong investor appetite was driven by continued hopes for further rate cuts even as the Bangko Sentral ng Pilipinas (BSP) nears the end of its easing cycle.
“Treasury bill average auction yields were mostly slightly lower week-on-week after recent dovish signals that the BSP could cut rates in February 2026, but also pointed out that the BSP is near the end of the monetary easing cycle,” he said in a commentary.
BSP Governor Eli Remolona Jr. recently said that one more interest rate cut was “on the table,” depending on upcoming economic data.
On external factors, he said yields would be influenced by “any potential aggressive US Federal Reserve rate cuts by the next Federal chair, as any future cuts could be matched locally to help maintain healthy interest rate differentials that stabilize the peso exchange rate.”
Ricafort also pointed to the benign inflation rate of 1.8 percent in December 2025, which brought the full-year average to a nine-year low of 1.7 percent, below the BSP’s target range of 2 to 4 percent.
The much-awaited data on Philippine gross domestic product for the fourth quarter will be released on Jan. 29.
