T-bill rates down after BSP pause

MANILA, Philippines — Investors demanded lower yields after the Bangko Sentral ng Pilipinas (BSP) finally took a pause in its tightening cycle, allowing the government to raise P15 billion in short-term securities.

The Bureau of the Treasury yesterday made a full award of P15 billion in T-bills for the second straight week.

Investors likewise continued to swarm the auction, with demand on an uptrend for four consecutive weeks now.

Demand hit P60.67 billion, the highest bids for T-bills in nearly four months or since the P61.85 billion in offers last Jan. 30.

Rates went down across the board, with the Treasury fully awarding P5 billion each for the three, six and 12 months offer.

Yields were already expected to decline this week following the decision of the BSP to keep the country’s key policy rates steady as inflation continues to ease.

Last Thursday, the central bank kept the overnight reverse repurchase facility at 6.25 percent.

This is the BSP’s first pause after raising key policy rates nine times since May last year for a total of 425 basis points.

Meanwhile, rates for the 91-day T-bills went down by 4.6 basis points to 5.777 percent from the secondary rate of 5.823 percent and below last week’s 5.874 percent.

The 182-day short-dated debt papers saw rates go down slightly by 0.8 basis points to 5.898 percent from the reference rate of 5.906 percent. This was also lower from last auction’s 5.991 percent.

On the other hand, rates averaged 5.945 percent for the 364-day T-bills, 0.6 basis points below the secondary rate and down from last week’s auction rate of 6.028 percent.

Overall demand for the short-term securities rose by four percent to P60.67 billion from last week’s P58.596 billion. The auction was oversubscribed by 4.04 times.

Bids went up for the six-month tenor to P20.08 billion but declined for the 91 and 364 days to P14.062 billion and P26.528 billion, respectively.

For this month, the Treasury targets to borrow P175 billion from the local debt market.