The Bureau of the Treasury (BTr) once again upsized the amount it awarded for the auctioned Treasury bills on Monday, particularly for the one-year IOUs, amid strong demand for the short-term ones.
The auction was 4.7 times oversubscribed, attracting a total of P116.3 billion in tenders, the BTr said.
This prompted the BTr to increase the award to P28.6 billion from the P25 billion program. It also increased the accepted amount for the one-year securities to P12.6 billion from the initial offered amount of P9 billion.
Meanwhile, P8 billion was allocated to each of the 91-day and 182-day securities, as planned.
The 91-, 182-, and 364-day IOUs fetched average rates of 5.452 percent, 5.565 percent, and 5.68 percent, respectively.
The comparable Bloomberg Valuation (BVAL) Service rates are 5.433 percent for the three-month tenor, 5.597 percent for the six-month tenor, and 5.725 percent for the one-year tenor.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the Treasury bill average auction yields again mostly eased slightly, after the comparable short-term BVAL yields declined slightly week-on-week, ahead of the upcoming inflation report for May 2025. Official data will be announced on Thursday, June 5.
Ricafort said the inflation rate is expected to ease further from 1.4 percent in April 2025, again below the BSP’s inflation target of 2 to 4 percent, which could justify a possible 0.25 percent BSP rate cut at the next rate-setting meeting on June 19.
“The peso exchange rate/net appreciation vs. the US dollar recently to the best in about nine months and global crude oil prices eased to among the lowest in more than four years or since April 2021, both of which would reduce importation costs and overall inflation that could also support further monetary easing/rate cuts for the coming months,” Ricafort said.
Regarding strong demand, Ricafort said that some investors may be locking in relatively higher yields still before they drop in the coming months.
