T-bill yields fall below 5% as market anticipates rate cuts

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it auctioned off on Tuesday as all tenors fetched average yields below 5%, with investors swamping the offer to lock in still-high rates ahead of expected cuts by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) this week.

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The Bureau of the Treasury (BTr) raised P22 billion as planned via the T-bills it placed on the auction block as the offer was more than four times oversubscribed, with total tenders reaching P88.225 billion. This was also higher than the P85.26 billion in bids recorded last week.

The Auction Committee made a full award as the T-bills were quoted at yields that were all lower than those fetched at last week's offering, the Treasury said in a statement.

Broken down, the government raised P7 billion as planned from the 91-day T-bills as the tenor was met with demand worth P30.825 billion. The three-month paper fetched an average rate of 4.759%, down by 5.3 basis points (bps) from 4.812% in the previous auction. Yields accepted were from 4.712% to 4.828%.

The Treasury also made a full P7.5-billion award of the 182-day debt as bids reached P25.85 billion. The average rate of the six-month T-bill went down by 5.7 bps to 4.873% from 4.93% last week. Tenders awarded carried yields from 4.83% to 4.963%.

Lastly, the BTr likewise sold the programmed P7.5 billion in 364-day securities as bids for the tenor hit P31.55 billion. The one-year paper’s average yield was at 4.962%, declining by 4.9 bps from 5.011% the previous week. Accepted rates were from 4.943% to 4.998%.