Yields on Treasury bills continued to decline at Monday’s auction, driven by the Bangko Sentral ng Pilipinas’ (BSP) recent interest rate cut and expectations of further monetary easing.
The BSP reduced its target repurchase rate by 25 basis points to 5.00 percent on August 29, marking a cumulative 75-basis-point cut so far this year. The move reflects the central bank’s response to easing inflation pressures and the need to support economic growth.
At Monday’s auction, the average yield on the 91-day T-bill fell to 5.046 percent from 5.173 percent in the previous week. The 182-day paper dropped to 5.222 percent from 5.323 percent, while the 364-day T-bill declined further to 5.376 percent from 5.457 percent.
Investor appetite remained strong, with total tenders surging to P156.4 billion for the P25 billion on offer—up significantly from P125.5 billion in the prior week.
Despite the robust demand and softening yields, the Bureau of the Treasury (BTr) chose not to upsize the offering, apparently holding out for further declines in bid rates, especially with a possible additional policy cut on the horizon amid a benign inflation outlook.
