Treasury bill, bond rates may drop after BSP cut

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be auctioned off this week could decline further after the Bangko Sentral ng Pilipinas (BSP) cut borrowing costs and signaled that they are nearing the end of their current easing cycle.

-  Aaron Michael C. Sy

The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday, or P8.5 billion each in 91-day and 182-day securities, and P8 billion in 364-day papers.

On Tuesday, the government will offer P30 billion in reissued 10-year T-bonds with a remaining life of seven years and 13 days.

T-bill and T-bond auction yields could go down in line with the broad week-on-week drop in secondary market rates after BSP Governor Eli M. Remolona, Jr. said they could opt to keep benchmark borrowing costs steady after their latest cut, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

"BSP Governor Remolona gave less dovish signals on a possible one 25-basis-point (bp) rate cut for the rest of 2025 if economic data remained weak, or even no more rate cut for the rest of 2025 if the economic data remained the same," he said.

Mr. Ricafort added that the market will monitor the August inflation data to be released on Friday as this could justify further reductions from the BSP.