Average yields on Treasury bills rose across all tenors at Monday’s auction, as the market awaited the Bangko Sentral ng Pilipinas’ (BSP) next monetary policy move amid expectations of a fresh uptick in inflation.
Analysts project that September inflation likely accelerated to 1.9 percent, up from 1.5 percent in August, primarily due to higher food prices following typhoon-related damage to agricultural output. Official inflation data will be released by the Philippine Statistics Authority on Tuesday, October 8.
Despite market caution, demand for short-term government securities remained strong. Total bids reached P74.52 billion against the P22 billion on offer. However, this was slightly lower than the P80.5 billion in tenders received the previous week. The Bureau of the Treasury awarded the full amount as programmed.
The 91-day T-bill yield climbed to 4.983 percent, up from 4.828 percent in the previous auction. The 182-day tenorfetched 5.128 percent, compared to 5.075 percent last week, while the 364-day paper rose to 5.228 percent from 5.171 percent.
Traders are closely watching whether the BSP will continue easing interest rates, with target reverse repurchase rate reduced by a total 75 basis points over the last three Monetary Board meetings. With upside risks to inflation—including supply-side pressures from food and fuel—many expect policymakers halt policy easing.
The BSP’s next policy meeting is scheduled for October 9.
