Average yields on treasury bills continued to ease at Monday’s auction, supported by growing expectations of further monetary policy loosening amid slowing inflation.
The decline in rates followed the release of May inflation data, which showed a continued deceleration, bringing the five-month average down to 1.9 percent—below the Bangko Sentral ng Pilipinas’ (BSP) target range of 2.0 to 4.0 percent.
With inflation softening faster than anticipated, the BSP has left the door open for possible rate cuts later this year. The central bank’s benchmark rate currently stands at 5.5 percent, after a series of reductions in previous quarters.
At this week’s auction, the Bureau of the Treasury (BTr) awarded the 91-day, 182-day, and 364-day T-bills at average yields of 5.451 percent, 5.524 percent, and 5.656 percent, respectively. These were marginally lower than the previous week’s rates, which stood at 5.452 percent for the three-month tenor, 5.565 percent for the six-month, and 5.680 percent for the one-year bill.
Investor appetite remained strong. The BTr attracted total bids of P98.3 billion for the P25 billion initially offered. With demand once again overwhelming supply, the Treasury upsized its award to P28.6 billion—matching last week’s increased issuance, when total tenders reached P116.3 billion.
