T-bill, bond rates may be mixed before BSP review

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be offered this week may end mixed as the market's focus turns to the Bangko Sentral ng Pilipinas' (BSP) policy meeting, where it could provide hints on its future policy direction.

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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 Wednesday, the government will hold the rate-setting auction for its new 10-year fixed-rate benchmark Treasury notes through which it plans to raise at least P30 billion, with the public offer scheduled to end on Friday. The offering also includes an exchange program for holders of bonds maturing over the next year.

"The size/volume of the new money will depend on the market appetite or demand, but definitely lower than what we raised last year," National Treasurer Sharon P. Almanza said in a Viber message.

In April last year, the government raised P300 billion via new 10-year benchmark notes, above the P30-billion program. The offering was done through a new issuance format targeting institutional investors like corporates, cooperatives, trust funds, retirement funds, and provident funds.

A trader said the bonds to be offered on Wednesday could attract at least P100 billion in tenders and fetch an average rate ranging from 6% to 6.75%.