Investor appetite for short-term government securities remained robust on Monday, allowing the Bureau of the Treasury (BTr) to fully award its Treasury bill (T-bill) and Cash Management Bill (CMB) offerings despite mixed movements in yields amid easing geopolitical tensions and moderating inflation expectations.
The Treasury raised P90 billion, comprising P60 billion in T-bills and P30 billion in CMBs, after total tenders reached P178.9 billion, nearly double the amount offered.
Demand for T-bills alone climbed to P122.6 billion, prompting the BTr to upsize its award of the 364-day tenor on the back of strong investor interest.
Yields were mixed across the curve. The 91-day T-bill averaged 5.245 percent, slightly higher than last week’s 5.217 percent, while the 181-day paper edged up to 5.764 percent from 5.754 percent. The benchmark 364-day bill, however, saw its average yield decline to 5.968 percent from 6.034 percent, suggesting investors were willing to lock in longer short-term tenors at lower returns.
The shorter-dated CMBs also attracted healthy demand, with bids totaling P56.3 billion, or 1.9 times the P30-billion offering.
The 35-day CMB fetched an average yield of 4.797 percent, up from 4.738 percent previously, while the 63-day paper settled at 5.081 percent compared with 5.052 percent last week.
The auction results point to sustained liquidity in the financial system even as investors recalibrate expectations for interest rates. The easing yield on the one-year T-bill suggests improving risk sentiment, supported by softer inflation pressures and reduced geopolitical uncertainties, while the modest uptick in shorter maturities indicates investors remain cautious about the near-term path of domestic monetary policy.
The strong oversubscription also gives the government continued flexibility to fund its borrowing requirements at competitive rates as market conditions stabilize.
