Treasury bill rates may be steady

RATES of the Treasury bills (T-bill) to be offered this week may be steady as better-than-expected July inflation data bolstered expectations of further policy easing by the Bangko Sentral ng Pilipinas (BSP).

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The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday, or P8 billion each in 91and 182-day securities and P9 billion in 364-day papers.

The government has canceled the auction of seven-year Treasury bonds scheduled for Aug. 12 to provide a clear market for its ongoing offering of five-year retail Treasury bonds (RTB).

T-bill rates “could be steady to again slightly lower” and track the sideways week-on-week movements seen at the secondary market after the Philippine July consumer price index (CPI) report and the peso’s recent recovery supported expectations of lower borrowing costs this year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ricafort added that the government’s ongoing public offer of the five-year RTBs that is scheduled to end on Friday could affect demand for the T-bills as it could siphon off some liquidity from the market, but this impact could be offset by the P516 billion worth of previously issued retail bonds that are set to mature on Tuesday.

Secondary market yields rose on Friday from the previous day’s closing levels amid some profit taking amid the high demand for the ongoing RTB auction, a trader said in an email. “We’re expecting government securities to trade sideways from here with a little downward bias on yields. We estimate BTr to have amassed P399 billion as of [Thursday].”