T-bill, bond rates may go down on easing hopes

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could go down on monetary easing bets and as demand returns to normal following the end of the government’s public offering of five-year retail Treasury bonds (RTB).

-  Aaron Michael C. Sy

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

On Tuesday, the government will offer P25 billion in reissued 10-year T-bonds with a remaining life of nine years and eight months.

T-bill and T-bond yields could decline this week, mirroring the week-on-week decline seen at the secondary market, following dovish signals from the central bank chief, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The markets have been anticipating a possible 25-basis-point (bp) Bangko Sentral ng Pilipinas (BSP) rate cut as early as the next rate-setting meeting on Aug. 28, as supported by benign inflation recently,” Mr. Ricafort said.

Investors are also pricing in a possible 25-bp reduction from the US Federal Reserve in September, he added.

A trader said in an email that the reissued 10-year bonds to be offered this week could see good reception and fetch rates ranging from 6% to 6.075%, broadly in line with secondary market levels.