Average rates on treasury bills were lower at Monday’s auction, reflecting expectations of further monetary easing by the Bangko Sentral ng Pilipinas (BSP).
Strong demand for the bills continued, with total bids surging to P103.5 billion from P92.2 billion last week. As a result, the Bureau of the Treasury increased the accepted bids to P28.4 billion, surpassing the original offering of P25 billion.
The yield on the 91-day treasury bill softened to 5.388 percent, down from 5.422 percent the previous week. Similarly, the 182-day debt paper saw a slight dip, with the yield falling to 5.543 percent from 5.566 percent. The average rate on the 364-day papers also declined to 5.627 percent, compared to 5.631 percent the week before.
The next meeting of the Monetary Board of the BSP is scheduled for August 28. Following a 25-basis point reduction in overnight rates during its June 19 policy meeting, economists anticipate further rate cuts. With inflation continuing to settle below the BSP’s target range of 2 to 4 percent, analysts expect two additional rate reductions in the coming months.
