T-bill rates fall as anemic GDP spurs rate cut bets
Yields on short-dated local government debts dipped anew as the disappointing fourth-quarter economic growth print strengthened the case for another interest rate cut.
As a result, the Bureau of the Treasury (BTr) was able to raise P37.8 billion via Treasury bills (T-bills), higher than the original plan to borrow P27 billion.
The offering attracted P176.8 billion in total bids, or 6.5 times the original size of the offering.
Local creditors sought an average rate of 4.579 percent for the 91-day T-bill, cheaper than the 4.666 percent previously.
The 182-day T-bill fetched an average rate of 4.672 percent, down from 4.751 percent last week.
Lastly, the average rate for the 364-day debt paper stood at 4.689 percent, lower than the 4.872 percent before.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said rates fell on hopes that the Bangko Sentral ng Pilipinas (BSP) would act on its earlier signal for another rate cut, especially after 2025 gross domestic product (GDP) had come in weaker than expected.
“The Treasury bill average auction yields were again slightly lower, triggered by relatively weaker local GDP growth data, which increased the odds of a 0.25-percentage point BSP rate cut at the next policy meeting on Feb. 19,” Ricafort said.
The Philippine economy recorded just 3 percent GDP growth in the fourth quarter, bringing the full-year average to 4.4 percent. This is below government targets and even the already conservative forecasts. As it is, Economic Planning Secretary Arsenio Balisacan said that while a slowdown had been expected, the slump was worse than anticipated.
Further, Ricafort highlighted that upcoming inflation data due on Feb. 5 could influence investor sentiment.
