The Treasury bills’ auction on Monday yielded mixed results, with a partial award for the 91-day paper, while the half-year IOUs were upsized from the programmed offer, the Bureau of the Treasury (BTr) said.
The one-year treasury bills were fully awarded, allowing the BTr to raise a total of P24.6 billion across all tenors, instead of the initial offer of P25 billion.
The overall auction was 2.6 times oversubscribed, attracting a total of P65.5 billion in tenders.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the latest auction results reflected cautious investor sentiment amid shifting rate expectations and geopolitical uncertainties.
“We may continue to see mixed results, as the market recalibrates expectations around inflation, geopolitical tensions such as in the Middle East, and upcoming domestic bond issuances,” Rivera said.
“Investor appetite will also be shaped by the June 25auction of 3-year and 25-year securities, which could offer better yields for those with longer horizons,” he added.
Reinielle Matt Erece, an economist at Oikonomia Advisory & Research Inc., said that while the rate cuts from last week prompted expectations of lower yields, new inflation risks may have offset this effect.
“As conflicts in the Middle East, faster economic activity after rate cuts, all factored in to higher inflation risks, the bond market may have factored in the possibility of the next rate cut to be postponed a bit later this year,” Erece said.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said Treasury bill results could remain mixed in the coming weeks, as long as there are high bid yields that will eventually be rejected, with these higher bids triggered by the tensions in the Middle East.
“The Treasury bill average auction yields were mostly slightly higher for the second straight week despite the latest 0.25 BSP rate cut to a new 2.5-year low at 5.25 percent and continued dovish signals on possible additional -0.25 for the rest of 2025 and possible cut in banks’ RRR in 2025, largely due to and overshadowed by the recent Israel-Iran war and the surprise US attacks on Iran’s nuclear facilities. That led to global crude oil prices rising to near five-month highs and the US dollar peso exchange rate at new highs in nearly three months at 57.60 levels,” he said.
The 91-day T-bills saw a partial award of P4.4 billion, compared to the P8 billion on offer, while the 182-day paper received a higher amount of P11.2 billion, against the P8 billion program.
As for the one-year security, P9 billion was raised as planned.
The 91-day paper yielded a rate of 5.53 percent, higher than the previous average of 5.459 percent and the Bloomberg Valuation Service (BVAL) rate of 5.471 percent.
The 182-day paper yielded 5.557 percent, which was higher than the previous average of 5.523 percent, but lower than the BVAL rate of 5.621 percent.
The one-year paper fetched a rate of 5.655 percent, inching down from the previous average of 5.657 percent, and also lower than the BVAL rate of 5.684 percent.
