Fresh geopolitical jitters trumped recent monetary easing by the Bangko Sentral ng Pilipinas, as yields on short term government securities rose at Monday’s auction following the US airstrike on Iran during the weekend.
The rate uptick came even as liquidity remained ample. Total tenders for Treasury bills reached P76.5 billion, nearly 2.8 times the P27 billion on offer. In a departure from recent auctions, however, the Bureau of the Treasury declined to upsize the award, signaling caution amid rising global risk premiums.
The 91 day Treasury bill fetched an average yield of 4.311 percent, up from 4.240 percent last week. The 182 day paper climbed to 4.417 percent from 4.357 percent, while the 364 day tenor rose to 4.564 percent from 4.501 percent.
The move highlights how quickly external shocks can offset domestic policy support. While the central bank’s recent easing was meant to anchor borrowing costs, escalating tensions in the Middle East have injected fresh inflation concerns into the market. Higher energy prices could feed into transport and food costs, complicating the inflation outlook and tempering expectations of further rate cuts.
Still, there were signs of underlying stability. Average auction yields remained below prevailing secondary market rates for comparable maturities, suggesting investors continue to view short term government debt as an attractive and relatively safe parking ground for funds.
For now, the Treasury market appears caught between supportive domestic liquidity and volatile global currents, with geopolitics holding the upper hand.
