Treasury bill yields continue to decline at Monday’s auction with lower inflation in August raising prospects of further monetary policy easing.
Anticipation the Bangko Sentral ng Pilipinas will further reduce the overnight rates at its policy meeting later this month has increased demand for T-bills, with total bids reaching P77.9 billion or 3.9 times more than the offered amount of P20 billion. Unlike previous auctions, however, the Bureau of the Treasury did not upsize its borrowing.
The average rate on the 91-day paper eased to 5.743 percent from 5.840 percent while that on the 182-day bill slipped to 5.940 percent from 5.980 percent last week. The average rate on the 364-day tenor also declined to 5.973 percent from 6.029 percent in the previous auction.
Even before the August inflation data was released earlier this month, which slowed to 3.3 percent, the slowest since January, the BSP reduced the overnight rates by 25 basis points to 6.25 percent at its policy meeting in mid-August.
