Treasury bill yields slipped across the board at Monday’s auction as expectations of another policy rate cut this year gathered steam, buoyed by benign inflation and a softening economic outlook.
Investor demand remained robust, with total tenders reaching P113.1 billion—more than four times the government’s P27 billion offer. The strong appetite gave the Bureau of the Treasury room to raise its acceptance to P37.8 billion, evenly split at P12.6 billion for each tenor.
Short-term rates continued to ease. The average yield on the 91-day Treasury bill declined to 4.731 percent from 4.755 percent in the previous auction. The 182-day paper followed suit, with the average rate slipping to 4.85 percent from 4.895 percent.
Yields on the benchmark 364-day bills also softened, settling at 4.916 percent compared with 4.937 percent last week, reinforcing the market’s expectation of lower borrowing costs ahead.
The downward shift reflects growing confidence that the Bangko Sentral ng Pilipinas has room to further ease monetary policy this year. Inflation has stayed within target, while recent economic indicators point to subdued growth, strengthening the case for additional support from rate cuts.
For the government, the auction results underscore favorable funding conditions, allowing it to borrow more at lower costs. For investors, the demand surge suggests continued preference for short-term government securities as markets position for an easing cycle.
With liquidity ample and rate-cut expectations firming, treasury bill yields may remain under downward pressure in the near term, particularly if inflation stays contained and growth signals remain muted.
