Yields on Treasury bills continued to ease at Monday’s auction, following the Bangko Sentral ng Pilipinas’ (BSP)decision last week to lower benchmark interest rates.
The BSP’s Monetary Board on Thursday trimmed the target reverse repurchase (RRP) rate by 25 basis points to 5.00 percent, marking a dovish shift in monetary policy. Corresponding adjustments brought the overnight deposit rate to 4.5 percent and the lending facility rate to 5.5 percent.
Market response was swift.
The average rate on the 91-day T-bill fell to 5.173 percent from 5.195 percent the previous week. The 182-day T-bill slipped to 5.323 percent from 5.398 percent, while the 364-day yield declined to 5.457 percent from 5.522 percent.
Demand surged across all tenors, with total tenders hitting P125.49 billion—five times the P25 billion on offer. The Bureau of the Treasury awarded the full amount as investors moved to lock in gains amid expectations of continued easing.
Analysts say the strong appetite for short-term government securities reflects growing market confidence that inflation will remain within target and that further rate cuts could be on the horizon.
The latest auction results reinforce the BSP’s forward guidance and underline the effectiveness of monetary easing in lowering borrowing costs, a key goal as the government looks to support economic growth through stable financing conditions.
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