Philippine bond yields decline

YIELDS on Philippine government securities fell last week due to strong demand and as investors expect the central bank to cut interest rates sooner following a sharp slowdown in economic growth.

- By Isa Jane D. Acabal

Benchmark yields fell by an average of 7.3 basis points (bps) week on week, according to PHP Bloomberg Valuation Service reference rates as of Nov. 14. The drop was broad-based, covering short-, medium- and long-term tenors, although late profit-taking trimmed some gains.

At the short end, yields on the 91-, 182and 364-day Treasury bills slipped 4.89, 3.35, and 7.18 bps, respectively, to 4.8914%, 5.0425%, and 5.1082%. Yields on medium-term bonds — those maturing in two to seven years — also dropped, with the biggest declines seen in the twoto five-year securities. The seven-year bond followed with a slightly smaller decrease.

At the long end of the curve, yields on 10to 25-year bonds also slipped, though by smaller amounts. Trading activity fell sharply from the previous week, showing investors turned cautious after the midweek rally.