Treasury bill yields were mostly higher at Monday’s auction as investors appeared to price in the possibility of tighter monetary policy ahead of the Bangko Sentral ng Pilipinas’ interest rate-setting meeting later this week.
The BSP is scheduled to review its policy stance on Thursday, August 27, with market participants closely watching the central bank’s next move amid evolving inflation and growth conditions.
The Bureau of the Treasury raised P57.7 billion from the auction, including P50 billion from regular treasury bills. Total tenders for the bills reached P99.6 billion, or roughly twice the P50 billion on offer.
Demand, however, was softer than at last week’s auction, when bids reached P167 billion. This week’s offering also included cash management bills, which attracted P23 billion in total tenders.
The 91-day T-bill rate rose to 5.051 percent from 5.008 percent previously, while the yield on the 364-day paper increased to 5.640 percent from 5.613 percent.
The six-month, or 182-day, T-bill was the exception, with its average rate easing to 5.433 percent from 5.442 percent at the previous auction.
The mixed but generally firmer results suggest investors are demanding slightly higher returns on short-term government debt as they position for Thursday’s BSP decision.
The upward move was more pronounced at the shorter and longer ends of the T-bill curve, while the six-month tenor edged lower, indicating that investors were not uniformly repricing rate expectations across maturities.
The Treasury also partially awarded the 35-day cash management bill at an average rate of 4.823 percent. The paper drew P23 billion in total tenders.
The auction comes with markets assess, whether the BSP will maintain its current policy settings or signal a shift in response to inflation risks and domestic economic conditions.
With short-term government borrowing costs already hovering above 5 percent for most maturities, the upcoming BSP decision could provide a clearer direction for yields in subsequent Treasury auctions.
