Treasury bill, bond rates may be range-bound on BSP easing bets

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could end mixed to track secondary market yield movements and as the market expects the Bangko Sentral ng Pilipinas (BSP) to further ease its policy stance as early as next month.

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

On Tuesday, the government will offer P30 billion in reissued 10-year T-bonds with a remaining life of nine years and 11 months.

T-bill auction rates could mirror the week-on-week decline seen for comparable benchmarks at the secondary market following dovish signals from the BSP, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, the 91-, 182-, and 364-day T-bills went down by 1.01 basis points (bps), 4.51 bps, and 1.56 bps week on week to end at 5.5126%, 5.6257%, and 5.6996%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data as of May 16 published on the Philippine Dealing System’s website.

BSP Governor Eli M. Remolona, Jr. said earlier this month that they are open to cutting rates by a further 75 bps this year amid cooling inflation. The central bank resumed its easing cycle in April with a 25-bp rate cut, bringing the policy rate to 5.5%.

The Monetary Board’s next meeting is scheduled for June 19.