The Bureau of the Treasury (BTr) made a full award of bids at the treasury bills auction yesterday that saw healthy demand for the short-term IOUs.
The auction was 2.3 times oversubscribed, attracting P50.1 billion in total tenders. This encouraged the BTr to raise the full program of P22 billion.
Specifically, the BTr awarded P7 billion each to the first two tenors, and P8 billion to the one-year security.
The 91-, 182-, and 364-day treasury bills fetched average rates of 5.128 percent, 5.562 percent and 5.726 percent, respectively.
The previous rates were 5.101 percent for the three-month tenor, 5.477 percent for the six-month tenor and 5.671 percent for the one-year tenor.
In comparison, the Bloomberg Valuation (BVAL) Service Rates were 5.17 percent, 5.496 percent and 5.72 percent for the respective securities.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said treasury bill average auction yields corrected slightly higher after five straight weeks of decline.
This came ahead of the widely expected policy rate cut of the Bangko Sentral ng Pilipinas, amounting to 0.25, Ricafort said.
“As most T-bill average auction yields are now slightly above 5.5 percent (except for the 91-day tenor at 5.128 percent); so T-bill yields corrected slightly higher to be usually close/slightly lower than short-term BVAL yield and usually slightly higher vs. the expected BSP one-day policy rate later week,” Ricafort said.
Ricafort said Treasury bill’s average auction yields also corrected slightly higher after some increased market demand/interest for long-term local government securities which mostly corrected lower after the lower US Treasury yields recently.
“For instance, the 10-year PHP BVAL yield eased to new 1.5-month lows at 6.12 percent (from the immediate high of 6.33 percent posted on January 17, 2025), after the benchmark 10-year US Treasury yield recently eased to 1.5-month lows at 4.49 percent (lower from the immediate high of 4.81 percent posted on January 14, 2025). This followed after the Trump Administration signaled that lowering the 10-year US Treasury yield would be a policy priority instead of criticizing the Fed rate decisions (since the Fed is independent/autonomous),” Ricafort said.
