T-bill, bond rates may drop on BSP cut hopes

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could go down to track secondary market movements amid hopes for further monetary easing, even with players expected to take positions before an upcoming offering of new 10-year benchmark notes.

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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 will offer P30 billion in reissued 10-year T-bonds with a remaining life of seven years and six months.

T-bill and T-bond yields could mirror the week-on-week decline seen at the secondary market as the market still expects a sixth straight cut from the Bangko Sentral ng Pilipinas (BSP) next week despite faster January inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

A trader said the reissued T-bonds to be auctioned off on Tuesday could fetch rates from 5.875% to 5.925% as players may be on the defensive before the jumbo 10-year bond issuance next week.

The government is looking to raise at least P30 billion through fresh 10-year benchmark bonds.

The rate-setting auction will be on Feb. 18, with the public offer period set to run until Feb. 20.