The treasury bills auction on Monday yielded mixed results: a partial award for the 91-day paper, and the half-year IOUs were upsized from the programmed offer, the Bureau of the Treasury (BTr) said.
Meanwhile, the one-year treasury bills were fully awarded, allowing the BTr to raise a total of P26.7 billion, compared with the initial offer of P25 billion.
The overall auction was three times oversubscribed, attracting a total of P74.2 billion in tenders across all tenors.
The 91-day T-bills saw a partial award of P6.5 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.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the mixed results in the treasury bills auction reflect the market’s shifting sentiment on interest rate expectations and liquidity preferences.
“The higher rate and partial award for the 91-day T-bill suggest that investors are pricing in some near-term risks or uncertainties possibly due to expectations of an inflationary uptick or cautiousness ahead of the BSP’s next policy move,” Rivera said.
“Investors might be demanding higher yields for very short-term placements to compensate for these risks,” he added.
The 91-day paper yielded 5.459 percent, higher than the previous average of 5.451 percent and the Bloomberg Valuation Service (BVAL) rate of 5.44 percent.
In contrast, Rivera noted that the decline in the 182-day rate and the upsized award point to strong demand in the medium-term space, likely driven by expectations that policy rates may start easing within the next six months.
“Investors are positioning early, locking in yields before any rate cuts materialize,” Rivera said.
The 182-day paper yielded 5.523 percent, which is lower than the previous average of 5.524 percent and the BVAL rate of 5.57 percent.
As for the 364-day IOU, the steady award and slight rate increase reflect a more balanced view, Rivera said.
“Investors are still seeking yield but appear slightly cautious about committing funds for longer terms amid lingering global uncertainties,” he said.
The one-year paper fetched a rate of 5.657 percent, inching up from the previous average of 5.656 percent, but lower than the BVAL rate of 5.692 percent.
“The Treasury bill average auction yields were mostly marginally higher but essentially little changed after the latest Israel-Iran war that led to global crude oil prices to new four-month highs and the US dollar peso exchange rate at new 1.5-months or since April 24, 2025 at 56.50 levels, both of which would lead to some pick up in importation costs and overall inflation that could potentially reduce/delay future Fed rate cuts and BSP rate cuts,” Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said.
