Treasury bill yields fell across all tenors at Monday’s auction, as the sharp deceleration in April inflation heightened expectations of potential monetary policy easing.
The Bureau of the Treasury (BTr) fully awarded its 25-billion-peso offering, with strong investor demand pushing total tenders to 70.3 billion pesos—nearly three times oversubscribed.
The average rate for the 91-day T-bill dropped to 5.546 percent from 5.573 percent last week. The 182-day tenor declined to 5.650 percent from 5.667 percent, while the 364-day paper eased more significantly to 5.655 percent from 5.697 percent.
Investor sentiment was buoyed by data showing inflation in April slowed to 1.4 percent, the slowest pace since November 2019—prior to the onset of the COVID-19 pandemic. The figure also landed at the lower end of the Bangko Sentral ng Pilipinas’ (BSP) 1.3 to 2.1 percent forecast range.
The continued deceleration has largely been driven by easing food prices, strengthening the case for a shift in monetary stance later this year. Analysts now see room for the BSP to cut rates further should inflation remain contained and global conditions allow.
The strong demand for government securities reflects confidence in easing inflation pressures and suggests that investors are positioning ahead of a potential turn in monetary policy.
