T-bill yields may decline further with BSP, Fed likely to cut rates

YIELDS on the Treasury bills (T-bills) to be offered this week could end lower ahead of expected rate cuts from both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

- A.M.C. Sy with Reuters

The Bureau of the Treasury (BT) will auction off P22 billion in T-bills on Tuesday or P7 billion in 91-day securities and P7.5 billion each in 182and 364-day papers.

The T-bills could fetch lower yields in line with the week-on-week decline seen at the secondary market as slower-than-expected November inflation bolstered expectations of a fifth straight easing move by the BSP this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Banking books’ year-end profit taking is still heavily weighing on the market and we expect same sentiment heading to the Monetary Board meet, where a 25-basis-point (bp) cut is already priced in,” a trader said in an email on Friday.