Average rates on treasury bills declined at Monday’s auction as demand picked up, following signals from the Bangko Sentral ng Pilipinas (BSP) that interest rates may be cut further amid slowing inflation.
The Bureau of the Treasury increased the accepted bids to P28.6 billion, up from the initially offered P25 billion, with total tenders reaching P84.3 billion.
Yields dropped across the board: the 91-day treasury bill yield slipped to 5.468 percent from 5.515 percent in the previous auction. Similarly, the 182-day bill’s average rate fell to 5.551 percent from 5.612 percent, and the 364-day paper edged down slightly to 5.694 percent from last week’s 5.702 percent.
On Friday, BSP Governor Eli Remolona indicated that the central bank still has room to cut rates twice this year, potentially by 25 basis points each time, given the current inflation trends and economic outlook.
Last month, the BSP’s Monetary Board trimmed the benchmark interest rate by 25 basis points to 5.5 percent, further easing borrowing costs. Since August of last year, the central bank has lowered borrowing costs by a total of 100 basis points.
This continued easing signals the BSP’s commitment to support economic growth while managing inflation, prompting stronger investor demand for government securities.
