T-bill yields fall after BSP rate cut

MANILA, Philippines — Short-term securities fetched lower rates across-the-board yesterday following the Bangko Sentral ng Pilipinas’ move to cut interest rates last week, the Bureau of the Treasury (BTr) said yesterday.

During yesterday’s auction, the 91-day Treasury bills (T-bills) fetched an average rate of 5.389 percent, 4.9 basis points lower than the 5.438 percent recorded in the previous auction last week.

Total tenders reached P19.85 billion, almost five times higher than the P4 billion offer size.

Rates for 182-day debt papers likewise declined by 5.7 basis points to 5.768 percent from last week’s level of 5.825 percent.

The auction was more than thrice oversubscribed, with total tenders amounting to P15.788 billion.

Lastly, rates for the 364-day T-bills averaged 5.936 percent, 4.1 basis points down from 5.977 percent last week.

Tenders reached P19.01 billion, more than three times larger than the P6 billion offer volume.

“It’s a good turnout. We have received more than thrice bid-to-cover ratio. Rates are across-the-board lower than previous, roughly five basis points so it was a good turnout for the BTr,” Deputy Treasurer Erwin Sta. Ana told reporters after the auction.

Sta. Ana said this is in line with market expectations that rates would drop by about five to 10 basis points for this auction.

“They are anticipating about five to 10 basis points lower, primarily driven by the rate cut last week and possible reserve requirement ratio cut as the Governor Diokno has alluded in the past couple of days. So I think the averages are in line with market view,” he said.

Last week, the BSP decided to cut interest rates by 25 basis points, ending the tightening cycle amid easing inflation.

Diokno said the Monetary Board is also set to discuss the reserve requirement ratio this week.