Government securities yields mostly climbed at Monday’s auction as investors priced in the Bangko Sentral ng Pilipinas’ (BSP) surprise 25-basis-point rate increase, although strong demand continued to underscore ample market liquidity.
The Bureau of the Treasury fully awarded its Treasury bill (T-bill) and cash management bill (CMB) offerings despite higher borrowing costs. Total tenders reached P123.3 billion for the P60-billion T-bill auction and P57.5 billion for the P40-billion CMB offer, reflecting sustained investor appetite for short-term government debt.
The average yield on the 91-day T-bill rose to 5.217 percent from 5.171 percent previously, while the 182-day paper climbed to 5.754 percent from 5.694 percent. The benchmark 364-day T-bill was the lone exception, with its average rate easing to 6.034 percent from 6.124 percent.
Short-dated cash management bills also tracked higher. The Treasury awarded the 35-day CMB at an average rate of 4.738 percent, up from 4.611 percent last week, while the 63-day paper fetched 5.052 percent from 4.942 percent.
The uptick in yields came after the BSP on Thursday raised key policy rates by 25 basis points in a move aimed at containing inflationary pressures. The decision prompted investors to demand higher returns, particularly on shorter-dated securities that are more sensitive to shifts in monetary policy.
Despite the rise in rates, the oversubscription of both T-bills and CMBs suggests investors remain eager to lock in attractive yields while maintaining flexibility amid an uncertain interest-rate environment.
Market participants will be closely watching upcoming inflation data and BSP signals for clues on whether further tightening remains on the table, a factor that could continue to shape demand and pricing in the government securities market in the weeks ahead.
