The Bureau of the Treasury (BTr) has upsized the amount it awarded for the auctioned treasury bills on Monday given strong demand for short-term securities.
The auction was 3.5 times oversubscribed, attracting a total of P87.5 billion in tenders, the BTr said.
This prompted the BTr to award P28.4 billion, instead of the P25 billion program, increasing the accepted amount for the six-month securities.
For the 182-day IOUs, the BTr raised P11.9 billion, instead of the P8.5 billion offered.
Meanwhile, P7 billion and P9.5 billion were fully awarded as planned for the 91-day and 364-day treasury bills.
The 91-, 182-, and 364-day securities fetched average rates of 5.526 percent, 5.618 percent, and 5.656 percent, respectively.
In comparison, the Bloomberg Valuation Service rate stood at 5.471 percent for the three-month tenor, 5.662 percent for the six-month tenor, and 5.7 percent for the one-year tenor.
The previous week’s auction rates were 5.526 percent, 5.607, and 5.651 percent, respectively.
“The Treasury bill average auction yields were mostly slightly higher, except for the steady 91-day tenor, (as) the headline inflation slightly picked up to 1.4 percent in June 2025 versus 1.3 percent in May 2025 amid the net increase in global crude oil prices to among three-month highs and the US dollar/peso exchange rate among two-month highs since the 12-day Israel-Iran attacks started but tempered by the tentative ceasefire,” Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said.
Ricafort said an offsetting positive factor is the more dovish signals recently given by Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona on possible additional 0.50 BSP rate cuts for the rest of 2025, amid benign inflation, and a potential cut in banks’ reserve requirement ratio in 2026.
“Fed Fund Futures priced in -0.53 Fed rate cuts for the rest of 2025 after mostly mixed US economic data recently and (US President Donald) Trump signaled possibly replacing Fed Chair (Jerome) Powell, which could increase the odds of future Fed rate cuts in the coming months that could be matched locally,” Ricafort said.
The increase in demand for the short-term IOUs could indicate that more investors wanted to lock in relatively higher Treasury bill yields before the BSP makes any move to cut its key local policy rates further in the coming months, Ricafort added.
