Anticipation of further monetary easing later this week kept Treasury bill yields on a downward path at Monday’s auction, as investors piled into short-dated government debt.
Robust demand enabled the Bureau of the Treasury to raise P37.8 billion, exceeding the P27-billion offering, with P9 billion initially allotted for each tenor. Total tenders reached a hefty P142.2 billion, underscoring strong liquidity in the market.
The rally comes ahead of the policy meeting of the Bangko Sentral ng Pilipinas on Thursday, where analysts widely expect a rate cut amid subdued economic growth and manageable inflation.
The Treasury said yields were also guided lower by the national government’s recently announced P1.4-trillion primary expenditure program, aimed at supporting economic expansion and reinforcing fiscal momentum.
As a result, the average rate on the 91-day Treasury bill fell to 4.350 percent from 4.492 percent in the previous auction. The 182-day paper eased to 4.433 percent from 4.578 percent, while the 364-day tenor slipped to 4.512 percent from 4.615 percent last week.
The decline in yields reflects growing expectations that monetary authorities will shift toward a more accommodative stance, potentially lowering borrowing costs further in the near term.
With demand outstripping supply by more than five times the offer, the latest auction signals that investors are positioning early for policy easing, locking in yields before rates potentially move lower in the months ahead.
