T-bill rates drop ahead of BSP meeting

MANILA, Philippines — The government upsized its short-term securities to P17 billion as rates slipped across the board ahead of the policy meeting of the central bank on Thursday.

The Bureau of the Treasury yesterday fully awarded and even upsized to P17 billion its second T-bills offer for May from the P15 billion original target.

The Treasury upsized the 364-day offer to P7 billion from the target P5 billion.

This came after the 364-day short-dated debt papers saw rates decline by 3.8 basis points to 6.037 percent in reference to the secondary market’s 6.075 percent.

Week-on-week, the tenor’s yield also moved downward by 1.9 basis points from the previous auction’s 6.056 percent.

On the other hand, rates for the 91-day offer also decreased by 5.5 basis points to 5.727 percent from the secondary rate of 5.782 percent and last week’s 5.78 percent.

Likewise, rates averaged 5.893 percent for the 182-day T-bills, 1.5 basis points lower than the secondary rate and also down from the last auction rate of 5.93 percent.

Both the three- and six-month securities were fully awarded at P5 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said softer gross domestic product growth of 5.7 percent in the first quarter could lead to dovish signals from the Bangko Sentral ng Pilipinas (BSP).

On Thursday, the BSP is widely expected to keep rates steady at 6.50 percent.

Ricafort added that yields for T-bills continue to ease amid lower global crude oil prices after tensions between Israel and Iran have subsided for now.

Meanwhile, T-bill demand increased 13 percent to P59.841 billion. The auction was oversubscribed by nearly four times.

Bids also went up across the board to P21.412 billion, P19.91 billion and P18.519 billion for the three, six and 12-month tenors, respectively.

For this month, the Treasury aims to borrow P210 billion from domestic creditors.

Of the total, P60 billion is expected to come from short-dated T-bills. It has so far raised P32 billion.