Treasury bill yields continued to ease at Monday’s auction as investors positioned for a possible shift toward monetary easing by the Bangko Sentral ng Pilipinas (BSP) amid weakening economic momentum.
Demand for government securities remained strong, with total tenders climbing to P176.8 billion from P156 billion in the previous auction. The robust appetite gave the Bureau of the Treasury room to increase its total award to P37.8 billion, well above the programmed P27 billion, without pushing rates higher.
Yields declined across all tenors. The 91-day treasury bill fetched an average rate of 4.579 percent, down from 4.666 percent last week. The 182-day paper eased to 4.672 percent from 4.751 percent, while the 364-day tenor saw a sharper drop to 4.689 percent from 4.827 percent.
The softer yield environment comes against a backdrop of slowing economic growth. Government data released last week showed gross domestic product growth decelerating further to 3.0 percent in the fourth quarter from 3.9 percent in the previous quarter. Full-year growth settled at 4.4 percent, significantly below the state’s target range, reinforcing expectations of policy support to stimulate activity.
Lower short-term rates suggest the market is increasingly comfortable locking in yields ahead of potential policy adjustments, particularly as inflation remains manageable and growth risks tilt to the downside. Elevated demand also reflects ample liquidity in the system, which continues to gravitate toward safe, short-dated instruments.
The BSP’s next monetary policy meeting is scheduled for Feb. 19, a key event that could shape rate expectations and influence the direction of domestic bond yields in the near term.
