The Bureau of the Treasury (BTr) fully awarded bids for Treasury bills on Monday in an auction marked by oversubscription and healthy demand for the short-term IOUs.
The auction was almost three times oversubscribed, attracting P74.2 billion in total tenders.
The BTr raised the full program of P25 billion for the auction.
The 91-, 182-, and 364-day securities fetched average rates of 5.573 percent, 5.667 percent, and 5.697 percent, respectively.
The rates rose across all tenors against the previous week’s auction numbers.
Meanwhile, the comparable Bloomberg Valuation Service rates are 5.515 percent for the three-month tenor, 5.671 percent for the six-month tenor, and 5.718 percent for the one-year tenor.
Explaining the results, Jonathan Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said the risk of steepening yields remains with the ongoing global tariff uncertainty.
“In light of these events, investors flock to short-term tenors,” Ravelas said.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said there is higher demand for the 91-day tenor than a week ago, as some market players anticipate another BSP rate cut as early as June 2025.
“(Investors are) locking in still relatively higher interest rate returns before policy rates go down further in the coming months, especially if the Fed cuts rates further to prevent the risk of a US recession. Fed rate cuts could be matched locally to maintain healthy interest rate differentials,” he said.
