Yields on treasury bills continued their downward trend at Monday’s auction, driven by expectations of further monetary policy easing amid signs of cooling inflation.
Investor demand was notably stronger, with total tenders reaching P78.4 billion for the P25 billion on offer—higher than the P70.3 billion in bids recorded last week, reflecting heightened market appetite for short-term government securities amid interest rate cut expectations.
The average rate on the 91-day T-bill dropped to 5.515 percent from 5.546 percent in the previous auction. Meanwhile, yields on the 182-day and 364-day papers also declined to 5.612 percent and 5.702 percent, respectively. Last week, the corresponding tenors fetched 5.650 percent and 5.655 percent.
The softer yields come in the wake of an encouraging inflation print, with headline inflation easing to 1.4 percent in April—the slowest pace since November 2019. The deceleration in price pressures strengthens the case for the Bangko Sentral ng Pilipinas (BSP) to cut interest rates in the coming months, particularly if global and domestic conditions remain favorable.
Market participants will closely monitor upcoming economic data and BSP signals, as lower borrowing costs could support stronger fiscal activity and broader economic momentum.
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