Treasury bill, bond rates likely to decline further

RATES of the Treasury bill (T-bill) and Treasury bonds (T-bonds) to be offered this week may decline further as hopes for looser monetary conditions here and in the United States grow after the Federal Reserve resumed its easing cycle last week and signaled more cuts to come.

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The Bureau of the Treasury (BTr) will auction off P25 billion in T-bills on Monday, or P8.5 billion each in 91-day and 182-day securities and P8 billion in 364-day papers.

On Tuesday, the government will offer P35 billion in a dual-tranche T-bond offering, or P10 billion in reissued seven-year papers with a remaining life of two years and seven months, and P25 billion in reissued 20-year securities with a remaining life of 16 years and nine months.

T-bill rates could drop this week, similar to the decline seen at the secondary market, due to expectations of further monetary easing by both the Bangko Sentral ng Pilipinas (BSP) and the Fed, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

This is after the Fed penciled in more rate cuts this year that could be matched by the BSP, he said.

Meanwhile, a trader said in an email that the T-bonds on offer this week could see good demand, with the reissued seven-year bond fetching rates ranging from 5.585% to 5.625% and the 20-year debt attracting bid yields between 6.275% and 6.325%.