T-bill, bond yields may end mixed on BSP bets

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be auctioned off this week could end mixed on uncertainty over the Bangko Sentral ng Pilipinas’ (BSP) future policy actions.

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The Bureau of the Treasury (BTr) will auction off P27 billion in T-bills on Monday, or P9 billion each in 91-, 182-, and 364-day papers.

On Tuesday, the government is targeting to raise up to P40 billion from a dual-tenor T-bond offering, as it could borrow between P15 billion and P25 billion via reissued seven-year papers with a remaining life of two years and five months, and between P10 billion and P20 billion through reissued 25-year debt with a remaining life of 23 years and 11 months.

Yields on the T-bills and T-bonds could track the mixed week-on-week movements at the secondary market following the BSP’s “less hawkish” policy guidance, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Thus, future BSP rate cuts are possible amid relatively slower local economic recovery...” he said.

At the secondary market on Friday, yields on the 91-, 182-, and 364-day T-bills fell by 11.79 basis points (bps), 9.17 bps, and 8.35 bps week on week to end at 4.4319%, 4.5437%, and 4.5946%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of Feb. 20 published on the Philippine Dealing System’s website.